Silver Price Forecast: XAG/USD bulls seem hesitant below $82.00; US NFP awaited
- Silver edges higher on Wednesday, though it lacks bullish conviction ahead of the US NFP.
- Monday's breakout through the 236% Fibo. backs the case for additional near-term gains.
- Any further move up might confront a barrier near the 38.2% Fibo., near the $85.25 area.
Silver (XAG/USD) steadies following the previous day's modest pullback from the $84.00 mark and trades with a mild positive bias during the Asian session on Wednesday. The white metal, however, lacks bullish conviction and is currently placed below the $82.00 mark as traders keenly await the release of the US Nonfarm Payrolls (NFP) report.
From a technical perspective, Monday's breakout through the 23.6% Fibonacci retracement level of the recent downfall from the all-time peak favors the XAG/USD bulls. However, the Moving Average Convergence Divergence (MACD) line has slipped below the Signal line while both remain above zero, and the contracting histogram suggests fading upside momentum. Adding to this, the Relative Strength Index (RSI) sits at 50 (neutral), reflecting balanced intraday forces.
Hence, any subsequent move up is likely to confront resistance near the $85.25 region, representing the 38.2% Fibo. retracement level, while the 200-period Simple Moving Average (SMA) on the 4-hour chart, around the 87.25 area, could cap further upside. The XAG/USD stands beneath the rising 200-period SMA, maintaining a corrective bias against the longer-term trend. That said, a topside extension would bring the 50% retracement at 91.95 into view. On setbacks, attention turns to the 23.6% retracement at 76.92, where a break would risk reasserting the broader downswing.
(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.
