Silver Price Forecast: XAG/USD consolidates below $79.00, around 50% Fibo. level
- Silver trades with a mild positive bias during the Asian session, though it lacks follow-through.
- The broader technical setup favors bulls and backs the case for a further appreciating move.
- Any further corrective slide is likely to find decent support near the 200-period EMA on the H4.
Silver (XAG/USD) is seen consolidating around the 50% Fibonacci retracement level of the March downfall and trading just below the $79.00 mark during the Asian session on Friday, up 0.50% for the day. The white metal remains on track to register gains for the fourth straight week and seems poised to climb further.
From a technical perspective, the XAG/USD is holding above the 200-period Exponential Moving Average (EMA), reaffirming the near-term constructive bias despite recent failures near the $81.00 mark. Moreover, the Relative Strength Index (RSI) near 57 hints at mildly positive momentum. That said, the Moving Average Convergence Divergence (MACD) has slipped back into negative territory. This, in turn, suggests a waning but still broadly supportive tone.
Meanwhile, initial resistance is aligned at the $80.00 psychological mark, ahead of the weekly swing high, around the $81.00 mark. A sustained break above this barrier would open the way toward the 61.8% retracement at $83.16. On the downside, immediate support is provided by the 200-period EMA at $77.01, ahead of the 38.2% Fibo. retracement at $74.82, while deeper losses would expose the 23.6% level at $69.67 and the cycle low area near $61.33.
(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.
