Silver Price Forecast: XAG/USD faces rejection near $70.00 as upside momentum fades
- Silver turns lower for the second straight day after failing to make it through $70.00.
- The setup points to waning upside pressure and backs the case for further losses.
- A sustained break below $66.60-$66.50 is needed to validate the negative outlook.
Silver (XAG/USD) continues its struggle to make it through the $70.00 psychological mark and turns lower for the second straight day on Tuesday. The white metal slides to the mid-$67.00s during the first half of the European session, though the technical setup warrants caution before positioning for an extension of the retracement slide from a two-month high, touched last Friday.
The XAG/USD maintains a bullish near-term bias following last week's breakout above the $66.55-$66.60 horizontal resistance. Moreover, the white metal holds well above the 200-period Simple Moving Average (SMA) on the 4-hour chart, suggesting that the broader uptrend is still intact. Meanwhile, the Relative Strength Index (RSI) is easing back toward the neutral 50 area and the Moving Average Convergence Divergence (MACD) is slipping into negative territory, hinting at waning upside pressure rather than a completed reversal.
On the downside, immediate support aligns with the $67.00 mark ahead of the $66.60-$66.55 resistance breakpoint, where buyers have recently attempted to stabilize the pullback. A deeper slide would expose the 200-period SMA at $61.30 as the next relevant technical floor, where the broader bullish structure would likely be reassessed if broken decisively.
On the top side, bulls might await sustained strength and acceptance above the $70.00 mark before positioning for any further gains towards the $71.00 round figure and the $71.55 hurdle. A sustained move beyond should pave the way for additional gains beyond the $72.00 mark, towards the $72.55 intermediate resistance en route to $73.00 and the $73.40 region.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
