Silver Price Forecast: XAG/USD consolidates near record highs on easing US-EU tensions
- Silver holds near record highs as markets draw relief from easing US-EU tensions.
- Safe-haven demand cools, but tight supply and industrial demand continue to underpin prices.
- Bulls remain in control even as momentum indicators point to consolidation.
Silver (XAG/USD) regains some ground on Thursday but lacks follow-through, consolidating near record highs as a modest improvement in risk sentiment tempers safe-haven flows. At the time of writing, XAG/USD is trading around $93.90, holding below the all-time high near $95.89 set on Tuesday.
Markets drew some relief after US President Donald Trump backed away from his threat to impose fresh tariffs on several European countries. In a Truth Social post late Wednesday, Trump said the tariffs scheduled for February 1 would not go ahead after a “very productive meeting” with NATO Secretary General Mark Rutte, adding that a framework agreement on Greenland and the Arctic region had been reached.
Despite the easing of immediate trade-war fears, underlying fundamentals remain supportive of further upside. Silver continues to benefit from its dual role as both an investment and an industrial metal, with tight physical supply conditions adding another layer of support.
From a technical perspective, XAG/USD is up around 32% so far this month, underscoring the strength of the broader uptrend.
On the 4-hour chart, Silver remains within a well-defined rising structure and is currently testing the 21-period Simple Moving Average (SMA), which is capping immediate upside attempts. The 50-period SMA, near 91.20, marks a deeper support zone and continues to slope higher.
On the downside, a decisive break below the 50-period SMA and the $90.00 psychological level would weaken the bullish structure and likely invite stronger selling interest, exposing the 85.00-86.00 region as the next support. A sustained move below that zone would open the door for a deeper corrective phase toward the 80.00 handle.
On the upside, bulls remain focused on a break above the $95.00 mark. A sustained push beyond that level would bring the $100.00 psychological level into focus.
The Relative Strength Index (RSI) is hovering near 54, easing from overbought territory and signaling cooling momentum while still holding in positive territory. Meanwhile, the Moving Average Convergence Divergence (MACD) remains above the zero line but is flattening, suggesting bullish momentum is slowing and favoring near-term consolidation.
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
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.
