Silver Price Forecast: XAG/USD bulls target break above $76.75 confluence hurdle

Silver attracts some follow-through buyers for the second consecutive day on Thursday.
The intraday technical setup favors bullish traders and backs the case for additional gains.
A sustained move beyond the $76.75 confluence is needed to reaffirm the positive outlook.

Haresh Menghani FXStreet

Silver (XAG/USD) is seen building on the previous day's bounce from the vicinity of a nearly two-week low, around the $73.00 neighborhood, and gaining positive traction for the second straight day on Thursday. The white metal climbs above mid-$76.00s during the Asian session, though it remains below the weekly high set on Tuesday.

From a technical perspective, the XAG/USD currently trades just below the $76.75 confluence hurdle – comprising the 100-hour Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level of the recent downfall from the monthly peak. A sustained strength beyond the said barrier will be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move.

Constructive momentum indicators on the 1-hour chart hint that selling pressure is moderating rather than accelerating. The Relative Strength Index is near 57, and the Moving Average Convergence Divergence (MACD) line is holding slightly above zero. Hence, a clear breakout through the aforementioned hurdle could lift the XAG/USD to the 38.2% Fibo. at $79.21 and then the 50% level at $81.14.

On the downside, the main structural floor emerges at the cycle low and Fibonacci anchor around $72.97, where buyers would be expected to show more determined interest if the current pullback extends.

(The technical analysis of this story was written with the help of an AI tool.)

XAG/USD 1-hour chart

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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.

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