Silver Price Forecast: XAG/USD fails near 23.6% Fibo. and slides back to $76.00
- Silver drifts lower during the Asian session on Friday, snapping a two-day winning streak.
- The broader technical setup warrants caution before positioning for any meaningful gains.
- A sustained strength beyond the 100-period EMA on H4 would negate the negative bias.
Silver (XAG/USD) struggle to make it through the 23.6% Fibonacci retracement level of the recent fall from the monthly swing high and attracts some sellers during the Asian session on Friday. The white metal, for now, seems to have snapped a two-day winning streak, though it manages to hold above the $76.00 mark.
Looking at the broader picture, the XAG/USD is holding below the 100-period Exponential Moving Average (EMA) on the 4-hour chart at $77.98, which should keep a lid on any further move up beyond the 23.6% Fibo. immediate hurdle. Meanwhile, the Relative Strength Index (RSI) hovers just below the midline, and the Moving Average Convergence Divergence (MACD) has turned positive.
However, improving momentum indicators only hint at a corrective rebound within a broader bearish setup defined by stacked Fibonacci and EMA resistance overhead. The 23.6% Fibo. and the 100-period EMA forms a nearby supply band that needs to be cleared to ease immediate downside pressure. A further advance would then face the 38.2% Fibo. at $79.39 and the 50% level at $81.30, with deeper barriers at $83.21 and $85.92.
On the downside, the main structural support emerges at the prior swing low and Fibonacci anchor at $73.21, where a breakdown would reopen the broader bearish extension toward fresh lows.
(The technical analysis of this story was written with the help of an AI tool.)
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.
