Silver Price Forecast: XAG/USD consolidates around $73.00/200-period EMA pivotal hurdle
- Silver struggles to gain any meaningful traction and oscillates in a range during the Asian session.
- Traders now seem reluctant ahead of Trump’s deadline for Iran to reopen the Strait of Hormuz.
- The technical setup favors bearish traders and warrants caution before positioning for any gains.
Silver (XAG/USD) extends its sideways consolidative price move for the second straight day and holds steady around the $73.00 mark during the Asian session on Tuesday. Traders now seem reluctant to place aggressive directional bets and opt to move to the sidelines ahead of US President Donald Trump's deadline for Iran to reopen the Straight of Hormuz amid fading hopes for a ceasefire.
From a technical perspective, the near-term bias is mildly bearish as the XAG/USD holds below the 100-period Simple Moving Average (SMA) on the 4-hour chart, while that average continues to trend lower and cap rebounds. Furthermore, the Moving Average Convergence Divergence (MACD) indicator (12, 26, 9) recovers from recent negative readings but remains subdued, hinting at fading downside momentum rather than a clear upside shift.
Adding to this, the Relative Strength Index (RSI) around 52 reinforces a neutral momentum backdrop, suggesting that sellers retain a slight advantage while directional conviction stays limited. Hence, any further strength beyond the 100-period SMA at $73.22 might confront resistance aligning with the 38.2% Fibonacci retracement of the March downfall, at $74.69. A sustained break above that band would open the door toward the 50.0% retracement at $78.89.
On the downside, initial support sits near $72.00, ahead of the 23.6% retracement at $69.50, which marks the first notable floor within the current corrective phase. A clear drop through $69.50 would expose the broader support area toward $61.11, where the measured advance began.
(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.
