Silver Price Forecast: XAG/USD bulls retain intraday control above $33.00 mark
|- Silver regains positive traction following the previous day’s pullback from the monthly peak.
- The bullish technical setup supports prospects for a further near-term appreciating move.
- Dips below the $33.00 mark might still be seen as a buying opportunity and remain limited.
Silver (XAG/USD) builds on the previous day's bounce from the $32.60 area and gains some follow-through positive traction on Friday. The momentum extends through the early European session and lifts the white metal to a fresh daily peak, around the $33.25-$33.30 region in the last hour.
Looking at the broader picture, the emergence of dip-buying validates this week's breakout through the top end of a nearly one-month-old descending channel was seen as a key trigger for bullish traders. Moreover, oscillators on the daily chart have just started gaining positive traction, which, in turn, supports prospects for a further near-term appreciating move for the XAG/USD.
Some follow-through buying beyond the $33.65-70 resistance zone, or the highest level since early April touched on Thursday, will reaffirm the constructive setup and allow the XAG/USD to reclaim the $34.00 round-figure mark. The subsequent move up has the potential to lift the white metal back towards the year-to-date high, around the $34.55-$34.60 zone touched in March.
On the flip side, weakness back below the $32.00 mark might still be seen as a buying opportunity and remain cushioned near the XAG/USD near the overnight swing low, around the $32.60 region. The latter should act as a pivotal point, which if broken decisively might expose the 100-day Simple Moving Average (SMA) support, currently pegged just above the $32.00 mark.
Some follow-through selling could make the XAG/USD vulnerable to testing the lower boundary of the aforementioned trend channel, currently around the $31.40 region. A convincing break below will negate the positive outlook and shift the near-term bias in favor of bearish traders, which, in turn, should pave the way for some meaningful downside.
Silver daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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