Silver Price Forecast: XAG trapped below $60 as bears eye $55
- Silver consolidates below $60 as bearish structure remains intact.
- RSI nears oversold territory, signaling sellers retain momentum.
- Break below $56.61 exposes YTD low and $55.00 support.
Silver price advances by over 1.50% on Tuesday, even as US Treasury yields rise and the US Dollar remains firm. Concerns about a fragile truce deal between the US and Iran keep the XAG/USD trading at $58.73, above its opening price.
XAG/USD Price Forecast: Technical outlook
Silver remains consolidated below $60.00, unable to clear either the $60.00 level or the year-to-date (YTD) low of $55.63.
Momentum remains bearish as depicted by the Relative Strength Index (RSI), with the RSI about to turn oversold.
For a bearish continuation, XAG/USD must clear the day’s low of $56.61. Below this, the YTD low is next at $55.63, followed by $55.00. A decisive break will expose the November 13 daily high-turned-support at $54.39, ahead of a tumble to $50.00 per troy ounce.
On the other hand, for a bullish reversal, buyers must surpass the March 23 swing low-turned-resistance at $61.01. Once hurdled, traders must push XAG/USD towards the 200-day Simple Moving Average (SMA) at $69.72 ahead of the $70.00 milestone.
XAG/USD Price Chart – Daily
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.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
