Silver Price Forecast: XAG/USD bounces off two-week low; retakes $81.00 amid bearish setup
- Silver snaps a three-day losing streak on Monday, though it lacks bullish conviction.
- The breakdown below an ascending trend line support backs the case for further losses.
- A sustained move beyond the $82.30 area is needed to negate the negative bias.
Silver (XAG/USD) stages a modest recovery from a nearly two-week low, around the $78.35 region touched during the Asian session on Monday, and climbs back above the $81.00 mark in the last hour. The white metal, for now, seems to have snapped a three-day losing streak, though it lacks bullish conviction.
From a technical perspective, an intraday breakdown below a short-term ascending trend-line support extending from the February swing low could be seen as a fresh trigger for the XAG/USD bears. The Moving Average Convergence Divergence (MACD) line stays below the signal line in negative territory and the histogram contracts, reflecting persistent but moderating downside momentum.
The Relative Strength Index (RSI) near 40 remains below the neutral 50 mark, confirming seller control while avoiding oversold conditions and leaving room for further weakness if pressure resumes. Weakness back below the $80.00 psychological mark will reaffirm the negative bias and open the way for deeper losses towards the next relevant bearish targets around the $78.00 mark and the $76.50 zone.
On the upside, initial resistance aligns with the former trend-line support around $82.30, followed by the recent consolidation area near $84.00 and then $86.00 on stronger recoveries. A sustained recovery above $82.30 would ease immediate downside risk, while a move through $84.00 would be needed to challenge the current bearish skew. Nevertheless, the near-term bias is cautiously bearish after the XAG/USD broke below the rising support trend line.
(The technical analysis of this story was written with the help of an AI tool.)
XAG/USD 4-hour 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.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
