• US Traders are on holiday due to US Independence day, so most assets trade within familiar ranges.
• Silver price is subdued and remains negative, spurred by depressed precious and base metal prices.
• Silver Price Forecast (XAGUSD): Positive divergence in the daily chart could open the door for further gains, as buyers target $20.45.

Silver (XAGUSD) is under pressure on Monday, amidst a liquidity-thin trading session, on the observance of the US Independence day. Portraying the aforementioned is XAGUSD which stays within a narrow $19.82-$19.88 range during the North American session. At the time of writing, XAGUSD is trading at $19.95.

Silver price remains below $20.00, influenced by the fall in gold and base metals

The sentiment is mixed, as portrayed by rising equities except for the Dax 40, while safe-haven peers drop in the FX space. The greenback is almost flat, while the US bond market will remain close. That said, US Treasury yields remained parked, while the silver price fell last Friday to a new 2-year low at around $19.38.

Despite that, the XAGUSD formed a hammer last Friday, which means that the silver price might be headed to the upside, and might re-test the May 13 swing low at $20.45. But first, silver buyers must lift the white metal price above the July 1 high at $20.30.

In the meantime, the US Dollar Index, a measure of how the US dollar performs against a basket of six rivals, barely climbs 0.06% and sits at 105.186.

Commerzbank analysts wrote that the gold/silver ratio has risen to nearly 90, meaning that the XAGUSD price is low compared to gold. They added that silver was being dragged down by falling gold prices and stated: “is being additionally depressed by the very weak base metals prices – this is because silver is not only an investment metal but to an equal extent also an industrial metal.”

In the week ahead, the US economic calendar will feature on Wednesday the US ISM Non-Manufacturing PMIs for June, Fed speaking with New York Fed President John Williams, and the FOMC’s last meeting minutes.

Silver Price Forecast (XAGUSD): Technical outlook

The white metal remains downward biased. However, the magnitude of the fall in the last week might be subject to a mean reversion move, further cementing the previously mentioned oscillators showing positive divergence between price action and the Relative Strength Index (RSI).

If the latter scenario plays out, XAGUSD’s first resistance would be $20.00. Break above will open the path towards $20.30, followed by a challenge of the May 16 low at $20.45. Otherwise, a re-test of the 2-year low at $19.38 is on the cards.