Silver Price Forecast: XAG/USD edges lower to near $36.00 on modest US Dollar strength

Silver price loses ground to near $36.10 in Wednesday’s Asian session.
US job openings show an unexpected increase in May, rising to 7.76 million.
Elevated global uncertainty and geopolitical risks might cap the Silver’s downside.

Lallalit Srijandorn FXStreet

The Silver price (XAG/USD) edges lower to around $36.10 during the Asian trading hours on Wednesday, pressured by a modest rebound in the US Dollar (USD). Traders will take more cues from the release of the US ADP Employment Change report for June, which is due later on Wednesday.

The Greenback receives support from a better-than-expected increase in labor market demand. This, in turn, exerts some selling pressure on the USD-denominated commodity price, as a firmer USD makes Silver more expensive for foreign buyers.

Data released on Tuesday showed that US JOLTS Job Openings rose to 7.76 million in May, compared to 7.395 million openings reported in April. This figure came in above the market expectation of 7.3 million.

On the other hand, escalating geopolitical tensions and elevated economic uncertainty could boost the safe-haven flows, benefiting the Silver price. US officials said that Iran was prepped to mine the Strait of Hormuz last month after Israeli strikes, but the mines were never deployed. US President Donald Trump stated that the US will “be there” unless Iran gives up its nuclear program.

Additionally, rising demand for industrial uses might contribute to silver’s upside. According to the Silver Institute, global silver demand is estimated to reach a new record in 2025, led by industrial use in photovoltaics and electronics, as well as a recovery in jewelry and silverware.

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

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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