Silver Price Forecast: XAG/USD keeps the bearish vibe, key support level emerges near $30.00
|- The Silver price gains ground to near $30.15 in Tuesday’s Asian session.
- The negative outlook of the index remains intact with a bearish RSI indicator.
- The first support level to watch is $30.00; the first upside barrier is seen at $30.85.
The Silver price (XAG/USD) posts modest gains around $30.15 during the Asian trading hours on Tuesday. The upside for the white metal might be limited due to investors liquidating positions to secure profits, possibly covering losses or margin calls on falling asset valuations, fueled by concerns about a global trade war. Nonetheless, the weaker Greenback might help limit the USD-denominated commodity price’s losses.
According to the daily chart, the bearish sentiment of the Silver remains in play as the price remains capped below the key 100-day Exponential Moving Average (EMA). Furthermore, the downward momentum is supported by the 14-day Relative Strength Index (RSI), which stands below the midline near 32.70, supporting the sellers in the near term.
The first downside target for the XAG/USD emerges at the $30.00 psychological level. Further south, the next contention level is seen at $28.80, the low of December 20, 2024. The additional downside filter to watch is $28.31, the low of April 7.
On the bright side, the immediate resistance level is located at $30.85, the high of January 21. Any follow-through buying above this level could pave the way to $31.77, the 100-day EMA. A decisive break above the mentioned level could see a rally to $33.20, the high of February 20.
Silver price (XAG/USD) 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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