Silver Price Forecast: XAG/USD buying remains unabated; fresh all-time high and counting

Silver builds on last week’s breakout momentum and extends the record-setting rally for the third straight day.
The broader technical setup favors the XAG/USD bulls and backs the case for a further near-term appreciation.
The extremely overbought daily RSI makes it prudent to wait for some near-term consolidation before the next leg up.

Haresh Menghani FXStreet

Silver (XAG/USD) prolongs its recent well-established uptrend and continues scaling new all-time peaks for the third straight day, rising to the 109.45 region on Monday. The white metal sticks to bullish bias through the early European session and currently trades around mid-$108.00s, up nearly 6% for the day.

Last week's breakout through the $96.00 horizontal barrier and a subsequent move beyond the $100 psychological mark were seen as key triggers for the XAG/USD bulls. Moreover, the ascending channel from $70.60 supports the uptrend, and the upper boundary at $107.13 has been breached, signaling an extension of the advance.

The Moving Average Convergence Divergence (MACD) line extends above the Signal line and holds in positive territory, and the widening histogram suggests strengthening bullish momentum. Sustained action above the former channel cap would keep buyers in control, suggesting that the path of least resistance for the XAG/USD is to the upside.

The Relative Strength Index at 83.57 is overbought and still rising, which warns of stretched conditions even as the broader tone stays firm. If momentum cools, pullbacks could find support toward the ascending channel floor near $95.26, while a series of higher lows would preserve the bullish structure and keep the focus on the upside.

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

XAG/USD 4-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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