Silver Price Forecast: XAG/USD bulls regain control as short-term momentum strengthens
- Silver extends gains on Friday as safe-haven demand rises amid escalating US-Iran tensions.
- Short-term momentum improves on the 4-hour chart, with price pressing against the upper Bollinger Band.
- MACD holds in positive territory and RSI near 66 signals firm upside traction.
Silver (XAG/USD) builds on its recent recovery on Friday, with prices climbing for a third consecutive day as lingering geopolitical risks fuel safe-haven flows. At the time of writing, XAG/USD is trading near $82.80, on track to post a weekly gain of more than 5%.
The white metal has regained bullish traction after sliding to nearly two-week lows earlier in the week and continues to advance despite a broadly stronger US Dollar, suggesting dip buyers remain active.
The latest leg higher comes as tensions between the United States and Iran escalate, with fears mounting over potential US military action amid a significant American military buildup in the Middle East.
On Friday, US President Donald Trump said he is considering a limited strike on Iran. The remarks followed his warning on Thursday that Tehran must reach a “meaningful deal” or face “bad things,” adding that he expects clarity on a new nuclear agreement within the next 10 to 15 days.
Beyond geopolitics, underlying fundamentals remain constructive. Steady institutional inflows and resilient industrial demand, along with sustained expectations of lower interest rates in the United States later this year, keep the broader outlook for Silver tilted to the upside.
From a technical perspective, the 4-hour chart points to improving short-term momentum. Price is hovering near the upper Bollinger Band as the bands begin to widen, signaling rising volatility and building bullish pressure following a prior period of contraction.
The Moving Average Convergence Divergence (MACD) extends above the Signal line and stands in positive territory, with a widening histogram suggesting strengthening bullish momentum.
Meanwhile, the Relative Strength Index (RSI) is holding near 66, reflecting firm upside traction while remaining below overbought territory, leaving room for further gains.
On the upside, a sustained break above the upper Bollinger Band near $82.39 could pave the way for a continuation toward the $86.00 region, with the next key resistance seen around $92.00.
On the downside, the 20-period SMA (Bollinger middle band) at $77.34 provides immediate support. A decisive break below this level would expose the lower Bollinger Band around $72.16, followed by the February swing low near $64.00
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
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
