XAG/USD Wedge Breakout Signals Potential Trend Shift as Bulls Eye $85.00

Traders' Opinions

Summary:

Silver Holds Gains Near $76.30 as Markets Brace for FOMC Minutes — But Geopolitical Tailwinds Begin to Fade Summary: Silver (XAG/USD) trades firmly near $76.30 during Wednesday's European session, buoyed by pre-FOMC positioning, though advancing US-Iran nuclear talks threaten to cap the white metal's upside as safe-haven demand softens.

BUY XAGUSD

EXP

TRADING

75.806

Entry Price

85.000

72.000

76.024 +2.505 +3.41%

0.0

Pips

Flat

72.000

Exit Price

75.806

Entry Price

85.000

Silver is holding onto early gains with a degree of conviction that has caught the attention of precious metals traders on Wednesday, with the white metal extending its advance to the $76.30 area as European markets get underway. The move comes ahead of what many market participants regard as the session's defining event — the release of the Federal Open Market Committee (FOMC) minutes from January's policy meeting, due at 19:00 GMT. For now, buyers appear content to hold their positions, though the broader narrative is becoming increasingly complex.

The January FOMC meeting was anything but uneventful. The Federal Reserve chose to pause its monetary easing cycle — a decision that followed three consecutive rate cuts — and signalled clearly that future policy adjustments would be driven by incoming data rather than a predetermined path. It was a pivot in tone that reinforced the Fed's commitment to caution, and one that markets are still digesting. Wednesday's minutes will offer a deeper look into the deliberations that shaped that decision, potentially revealing the degree of consensus — or lack thereof — among policymakers. Traders will be parsing every line for clues on timing, thresholds, and the Fed's tolerance for stubborn inflation.

According to the CME FedWatch tool, markets are currently pricing in no rate changes at either the March or April meetings, with the Fed broadly expected to remain on hold in the near term. From a theoretical standpoint, this is a headwind for Silver. As a non-yielding asset, the white metal traditionally struggles in an environment where interest rates remain elevated for longer, since the opportunity cost of holding it rises relative to interest-bearing alternatives. Yet Silver's resilience near $76.30 suggests that not all traders are positioning defensively — some clearly see value in holding the metal into the minutes, either as a hedge or in anticipation of a more dovish-leaning set of deliberations than the market currently expects.

That said, there is a second and arguably more significant development weighing on Silver's upside potential, and it has nothing to do with monetary policy. Reports emerging from Geneva on Tuesday indicated that nuclear talks between the United States and Iran have made tangible progress. Washington confirmed after meetings with Iranian delegates that meaningful headway had been achieved, a characterisation echoed by Badr Albusaidi, Oman's foreign minister and a key mediator in the negotiations. Albusaidi described the talks as having "concluded with good progress towards identifying common goals and relevant technical issues," according to the BBC. The diplomatic signals, while still early-stage, represent a notable de-escalation in one of the region's most enduring geopolitical fault lines.

For Silver, this matters. A meaningful portion of the metal's recent demand has been underpinned by safe-haven flows tied to geopolitical uncertainty. When tensions recede — or even appear to recede — that premium evaporates quickly. The prospect of a US-Iran rapprochement, however tentative, introduces a structural headwind that could limit how far Silver can rally from current levels, even if the FOMC minutes deliver a mildly supportive tone.

In my view, Silver is navigating a narrowing corridor of opportunity. The technicals remain broadly constructive — price is holding key levels and the short-term trend has not been broken — but the fundamental backdrop is becoming less accommodating. The Fed is in no hurry to cut, geopolitical risk is easing at the margins, and the dollar is unlikely to weaken meaningfully without a clear shift in the rate outlook. Bulls may find the $76.30–$77.00 region increasingly difficult to push through without a fresh catalyst.

The FOMC minutes at 19:00 GMT will be the decisive factor for the remainder of Wednesday's session. A more hawkish-than-expected tone risks unwinding today's gains. A softer, more uncertain tone from Fed officials could give Silver the fuel it needs to extend higher. Either way, the next few hours are likely to define Silver's near-term trajectory — and traders would do well to remain nimble.

echnical Analysis

From a technical perspective, Silver (XAG/USD) is navigating a critical inflection point on the 2-hour chart. After a dramatic collapse from highs above $118 in late January, price has spent the better part of February carving out a base in the $72.50–$75.00 region, and is now trading around $75.67, at what appears to be a decisive technical juncture.

The most prominent pattern developing on the chart is a descending wedge formation — a structure defined by converging lower highs and lower lows that has been compressing price since the February 11 highs near $85.00. Price has now broken above the upper boundary of this wedge, a development that carries meaningful bullish implications. Wedge breakouts of this nature, particularly when occurring near established support, often precede sharp directional moves and tend to attract momentum-driven participation once the break is confirmed.

The $72.50 horizontal support zone has acted as a firm floor throughout this corrective phase, having been tested on multiple occasions without yielding. This level aligns with a broader support band visible on the chart and represents a structurally important area that bears would need to convincingly breach to shift the medium-term bias decisively lower. So long as price holds above this region, the path of least resistance favours the upside.

To the downside, a failure of the wedge breakout and a return below $75.00 would raise concern, while a close below $72.50 would invalidate the bullish thesis entirely and expose price to further downside toward the $70.00–$67.50 area.

On the upside, the projected arrow on the chart points toward the $85.00 horizontal resistance band — a level that capped the recovery rally in early-to-mid February and now represents the first meaningful ceiling for any renewed advance. A clean break and sustained hold above $85.00 would be technically significant and would shift focus toward the $92.50 resistance zone, another well-defined horizontal level visible on the chart that previously acted as support during the late January breakdown.

The broader structure, while damaged by the steep January-February decline, is showing early signs of stabilisation. The wedge breakout, the hold of key support, and the constructive price action near current levels collectively support a cautiously bullish near-term outlook — contingent on follow-through above $76.50–$77.00 to confirm the move has genuine momentum behind it.

TRADE RECOMMENDATION

BUY SILVER

ENTRY PRICE: $75.80

STOP LOSS: $72.00

TAKE PROFIT: $85.00

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XAG/USD Wedge Breakout Signals Potential Trend Shift as Bulls Eye $85.00

echnical Analysis

Risk Disclosure