Silver Price Forecast: XAG/USD bulls flirt with descending trend-line hurdle, above $57.00
- Silver trades with a positive bias for the third straight day on Tuesday.
- The bullish technical setup supports prospects for further appreciation.
- Failure near a descending trend-line would negate the positive outlook.
Silver (XAG/USD) attracts buyers for the third straight day and climbs back above the $57.00 mark during the Asian session on Tuesday. The white metal, however, remains below the overnight swing high, with bulls awaiting a breakout through a short-term descending trend-line hurdle before positioning for further gains.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is marginally positive, and the Relative Strength Index (RSI) near 52 hints at stabilizing momentum. Hence, a sustained move beyond the aforementioned barrier should pave the way for additional gains. The XAG/USD might then climb to the 38.2% Fibonacci retracement level of the decline from the monthly top near $58.06, en route to the 100-period Simple Moving Average (SMA) on the 4-hour chart, just ahead of the $59.00 round figure.
The latter nears the 50% retracement level and acceptance above this would be needed to ease the current bearish bias, which should open the way to higher retracement objectives. However, a failed attempt to conquer this confluence would suggest that rallies remain vulnerable while that barrier stays overhead. Meanwhile, higher barriers are seen at the 61.8% level at $60.04 and the 78.6% retracement at $61.46.
On the downside, immediate support comes from the 23.6% Fibonacci retracement at $56.83, and a drop back below this pivot would likely reassert selling pressure and expose the structural floor near $54.84.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
