Silver Price Forecast: XAG/USD clings to 200-day SMA as Fed takes center stage

Silver trades flat near $70 as traders await the Fed's monetary policy announcement.
Technically, XAG/USD has reclaimed its 200-day SMA, which now acts as immediate support.
Momentum indicators show signs that bearish pressure is beginning to fade, with the RSI recovering from near-oversold territory.

Vishal Chaturvedi FXStreet

Silver (XAG/USD) trades virtually unchanged on Tuesday around $70.00 after reclaiming its 200-day Simple Moving Average (SMA), as traders await the Federal Reserve's (Fed) monetary policy announcement before placing large directional bets.

The white metal is struggling to capitalize on the weaker US Dollar (USD) and lower Oil prices, which have come under pressure after the United States and Iran reached a framework agreement over the weekend.

Since the war began, Silver has traded more like an interest rate-sensitive asset than a traditional safe haven. The war-driven energy shock prompted traders to scale back expectations for Fed rate cuts and even price in the possibility of a rate hike later this year, which pushed XAG/USD down more than 30% from its pre-war levels.

However, following the announcement of the US-Iran agreement, buyers have gradually returned to the market as falling Oil prices ease inflation concerns.

Even so, traders appear reluctant to chase prices higher, with the Fed's monetary policy announcement likely to act as the next major catalyst in determining whether Silver can extend its recovery or surrender recent gains.

Technical analysis:

In the daily chart, XAG/USD holds a bearish near-term bias as price sits below the 100-day Simple Moving Average (SMA) at $78.54 while only marginally above the 200-day SMA at $68.74. This configuration suggests the broader trend has softened, with the 200-day SMA offering tentative medium-term support and the 100-day SMA now acting as an overhead cap.

Momentum indicators are showing early signs of stabilization. The Relative Strength Index (RSI) has recovered to 45.49 from near-oversold levels, suggesting selling pressure is easing. Meanwhile, the Moving Average Convergence Divergence (MACD) remains in negative territory, but the fading red histogram indicates bearish momentum is beginning to weaken.

On the downside, if the 200-day SMA fails to provide support, a sustained break below it could expose the next major support zone near $60.00. On the topside, recovery attempts are likely to face initial resistance at the 100-day SMA around $78.54. A daily close above that level would ease the bearish bias and open the door for a move toward the next resistance area near $90.00.

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

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

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.

AUD/USD stays defensive below 0.7150 after Chinese data

AUD/USD remains on the back foot below 0.7150 in the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. Mixed Chinese activity data for August also fail to inspire the Aussie.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold regains $4,300 as traders await FOMC meeting

Gold regains $4,300 in the Asian session on Tuesday, but remains vulnerable near a one-month low, touched the previous day. Fed rate-hike expectations and inflation concerns remain supportive of elevated US bond yields, underpinning the US Dollar and weighing on the non-yielding bullion. Bears, however, might wait for the outcome of a two-day FOMC meeting on Wednesday before placing fresh bets.

WTI rises above $98.50 amid Middle East supply fears

West Texas Intermediate oil price extends its gains for the second successive day, trading around $98.60 per barrel during the Asian hours on Tuesday. Crude oil prices appreciate as traders continue to navigate heightened uncertainty over global supply.

Hard assets are entering their next explosive phase – Are you positioned?

It’s official: Commodities and Hard Assets have become the best-performing asset class of 2026. In a year defined by persistent inflation, geopolitical conflict, rising sovereign debt and intensifying supply disruption, capital is rotating aggressively into the one area governments cannot print and central banks cannot manufacture: scarce physical assets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.