Silver Price Forecast: XAG/USD drops toward $28.50 due to bearish bias

Silver price may extend losses as daily chart analysis indicates a bearish bias.
The XAG/USD pair consolidates within the descending channel pattern.
The 14-day RSI suggests that Silver price trades within a range between $29.70-$28.70.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) continues its losing streak for the third successive session, trading around $28.70 per troy ounce during the early European session on Thursday. An analysis of the daily chart indicates a bearish bias as the XAG/USD pair consolidates within the descending channel pattern.

The momentum indicator Moving Average Convergence Divergence (MACD) indicates the strengthening of bearish bias for Silver. This configuration indicates that the overall trend turns negative as the MACD line breaks below the centreline and a signal line.

The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, suggesting Silver price trading within a range between $29.70-$28.70. If the RSI declines below the 30 level, it generates buy signals and indicates an oversold condition of the commodity asset.

On the downside, the Silver price may find key support around the psychological level of $28.00. A break below this level could exert pressure on the XAG/USD pair to approach the vicinity around the lower threshold of the descending channel around the level of $27.50.

In terms of resistance, the Silver price may find the immediate barrier around the nine-day Exponential Moving Average (EMA) at $29.30, followed by the significant level of $30.00.

A breakthrough above the latter could lead the price of the grey metal to reach the upper boundary of the descending channel around the level of $30.50. A breakthrough above the latter could lead the XAG/USD pair to test the four-week high of $31.55.

XAG/USD: Daily Chart

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

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

GBP/USD clings to small gains near 1.3450 after UK jobs data

GBP/USD trades in positive territory at around 1.3450 in the European session on Tuesday. The UK ILO Unemployment Rate remained at 4.9% in the three months to May, compared with expectations of 5%, but failed to provide any impetus to the British Pound's renewed uptick. Traders stay cautious amid US-Iran uncertainty and the UK political transition.

EUR/USD keeps range above 1.1400 after German ZEW

EUR/USD is keeping its range above 1.1400 in Tuesday's European session, as the US Dollar (USD) retreats following Monday's rebound. Nevertheless, the uncertainty around the US-Iran conflict limits the pair's upside. Meanwhile, the Euro (EUR) pays little heed to the strong German sentiment data, as traders await Thursday's European Central Bank policy announcements, which could drive the Euro's near-term valuation.

Gold extends recovery toward $4,100

Gold gains traction following Monday's choppy action and advances toward $4,100 on Tuesday. However, the uncertainty surrounding the conflict in the Middle East and growing expectations for a hawkish Federal Reserve policy outlook could make it difficult for the precious metal to gather bullish momentum in the near term.

Bitcoin extends advance as ETF inflows, Iran war mediators' proposal lift risk mood

Bitcoin extends its gains, trading above $65,800 after closing above the key technical hurdle the previous day. The bullish price action is further supported by the return of institutional demand, with spot Exchange Traded Funds continuing their inflows on Monday. In addition, the renewed hopes for peace between the US and Iran have lifted risk sentiment, providing an additional tailwind for the Crypto King.

Buy the dip on the Dow Jones and S&P? Forex Trading Gold descending triangle

Trading during a war, a pandemic, during trade disputes, and other geopolitical events, especially when some major players are sociopathic, can be quite challenging. The Iran war is no exception. The Iran war is no exception.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.