Silver Price Analysis: XAG/USD slides further below $28.00, lowest since May 9

Silver drifts lower for the second straight day and plummets to a two-and-half-month low.
The technical setup favors bearish traders and supports prospects for a further downfall.
Any attempted recovery move is likely to attract fresh sellers near the $28.55-$28.60 area.

Haresh Menghani FXStreet

Silver (XAG/USD) remains under heavy selling pressure for the second straight day on Thursday and dives to its lowest level since May 9, around the $27.80 region during the Asian session.

From a technical perspective, a sustained breakdown through the $28.65-$28.55 horizontal support, which coincides with the 100-day Simple Moving Average (SMA), could be seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart have been gaining negative traction and suggest that the path of least resistance for the XAG/USD is to the downside.

Hence, a further decline towards testing the next relevant support, around the $27.40-$27.30 horizontal resistance breakpoint, en route to the $27.00 mark, looks like a distinct possibility. The downward trajectory could extend further toward the $26.60-$26.55 intermediate support before the XAG/USD eventually drops to the 200-day SMA, currently pegged near the $26.00 mark.

On the flip side, any meaningful recovery attempt now seems to confront stiff resistance around the $28.55-$28.65 region. The said barrier should act as a key pivotal point, which if cleared decisively might trigger a short-covering rally. The XAG/USD might then climb beyond the $29.00 round figure, towards the $29.40-$29.45 area, or the weekly top, en route to the $29.80 region.

This latter is closely followed by the $30.00 psychological mark, above which the XAG/USD could accelerate the positive move towards the $30.35-$30.40 short-term trading range support breakpoint. The subsequent move up should pave the way for a move towards reclaiming the $31.00 round-figure mark.

Silver daily chart

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD stuck as the RBA talks tough into a slowdown

The Australian Dollar is going nowhere in a hurry, and the contradiction at its core explains why. The Reserve Bank of Australia keeps dangling the prospect of another hike, yet the economy it governs just expanded 0.3% in the first quarter, a clear step down from the prior pace. A central bank threatening to tighten into a visible slowdown is not a recipe for conviction in either direction, and the tape shows it.

USD/JPY: Japanese Yen coiled at the line, leaning on everyone but Japan

The Yen is doing very little, and that stasis is the whole story. USD/JPY sits glued near 160.00 not because Japan has found new strength, but because two outside forces are fighting to a draw over it: a US rate complex that keeps the dollar bid, and a Ministry of Finance that refuses to let the line break.

Gold declines below $4,500 on stalled US-Iran ceasefire talks, US NFP data looms

Gold price edges lower to near $4,470 during the early Asian session on Friday. The precious metal remains volatile amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Bitcoin falls below $64K as demand turns negative, short-term holders' selling intensifies

Bitcoin has fallen below $64,000 on Thursday amid weakening market demand and mounting selling pressure from short-term holders. The leading cryptocurrency slipped toward the $63,000 level amid a broader risk-off environment, with several key metrics signaling one of the most challenging periods of the current market cycle.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.