Silver Price Forecast: XAG/USD remains depressed near $82.25; bulls not ready to give up
- Silver drifts lower on Tuesday and stalls a two-day-old recovery move from the $64.00 mark.
- Monday's breakout through the 236% Fibo. level backs the case for additional near-term gains.
- Any further move up, however, might confront a stiff barrier near the $86.25-30 confluence.
Silver (XAG/USD) struggles to capitalize on its recent goodish recovery move from the $64.00 mark, or its lowest level since December 17, touched last week, and edges lower on Tuesday. The white metal, however, trims a part of intraday losses and trades around the $82.25-$82.30 region during the first half of the European session.
From a technical perspective, Monday's breakout and acceptance above the 23.6% Fibonacci retracement level of the recent sharp pullback from the all-time peak favors the XAG/USD bulls. The Moving Average Convergence Divergence (MACD) line remains above the Signal line and in positive territory, though the histogram has started to contract, suggesting fading upside momentum. The Relative Strength Index (RSI) prints at 52, neutral, reflecting a modest stabilization above the 50 mark.
Hence, any subsequent move up is likely to confront stiff resistance near the $86.25-$86.30 confluence – comprising the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibo. retracement level. A sustained break above the first barrier would bring $87.04 into focus and strengthen the rebound; failure to overcome it would preserve the broader bearish bias beneath the rising long-term average.
(The technical analysis of this story was written with the help of an AI tool.)
Silver 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.
