Silver Price Forecast: XAG/USD consolidates near $66.35 at the start of the week
- Silver price wobbles at around $66.35 in the opening trade on Monday.
- US President Trump expresses openness to talk Iranian President Pezeshkian in UN General Assembly.
- Fed’s Kashkari warns that inflation is too-high and broad-based.
Silver price (XAG/USD) trades in a tight range at the start of the week near $66.35 during the Asian trading session. The white metal consolidates while investors remain focused on developments in Middle East regarding the oil supply and the United States (US) interest rate outlook.
Oil prices extend their decline in Monday’s Asian trade as hopes of US-Iran diplomacy have increased, following remarks from President Donald Trump that he would probably be open to meeting Iranian President Masoud Pezeshkian this week on the sidelines of the United Nations (UN) General Assembly in New York, TimesNow reported.
Lower oil prices ease fears of high inflation expectations, a scenario that diminishes high interest rate projections. This bodes well for non-yielding assets, such as Silver.
Meanwhile, investor seek fresh cues regarding how long the Federal Reserve (Fed) will continue the monetary-tightening cycle, which started last week in an attempt to counter inflationary pressures.
Over the weekend, Minneapolis Fed Bank President Neel Kashkari said that “inflation is too high across all sectors of the US economy”. Kashkari clarified that high inflation is not only driven by rising oil prices, adding that resilient economic growth is also boosting price pressures.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $66.35, holding a modest bullish bias as price remains above the 20-day Exponential Moving Average (EMA) at $65.22. The short-term trend tone is constructive while the metal sustains this break, with the Relative Strength Index (RSI) hovering near 54, suggesting steady rather than overstretched upside momentum.
On the downside, immediate support is seen at the 20-day EMA around $65.22, where a daily close below would hint at fading bullish pressure and a deeper corrective phase toward prior lows. Looking up, the major hurdle for the Silver price seems the August 28 high at $71.12
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
