• Silver pares previous losses and hits session highs above $52.00, favoured by widespread USD weakness.
• A sound Democratic victory in the US midterm elections has boosted government bonds, sending the US Dollar tumbling.
• Technically, XAG/USD remains trapped within a downtrend channel while below $53.50

Silver (XAG/USD) is one of the winners of the Republican defeat in the US midterm elections. The Precious metal has appreciated more than 4% on the day so far, reaching weekly highs at $52.00 after hitting a fresh one-year low at $48.62 earlier this week.

Precious metals are rallying on Wednesday, favoured by broad-based US Dollar weakness, following news that Democrats took control of the US Congress and Senate after Tuesday’s elections. Market concerns of tougher regulation in AI spooked investors away from tech shares, seeking safety in government bonds and pulling US Treasury yields lower.

Analysts at Rabobank note that the market had initially interpreted Democrat control of Congress as implying “fewer fiscal giveaways and therefore less inflation,” a combination that “suggests lower yields on treasuries which have negative implications for the USD.” Correlation studies suggest that this might provide support to precious metals.

Technical Analysis: The bearish channel’s top is at the $53.50 area

XAG/USD trades at $52.07 after a sharp rebound on Wednesday, which has shifted momentum indicators on the 4-hour charts into bullish territory. The Relative Strength Index has popped up above the key 50 level, and the Moving Average Convergence Divergence (MACD) indicator has turned positive. Price action, however, remains within a downtrend channel from late September highs.

Immediate resistance is located at the channel ceiling near $53.50, followed by the horizontal barrier at $54.65 (October 27 and 28 highs), where sellers could reassert control. Above that, further resistance emerges at the October 20 high near $58.60.

Bears, on the contrary, are likely to find support at the mentioned lows near $48.60 ahead of the channel bottom, now around $48.00. If these levels give way, the next target would be the late October 2025 low, near $45.50.