Silver Price Forecast: XAG/USD gains to near $80.00, but holds mildly bearish near-term bias

Silver price drifts higher to around $79.90 in Wednesday’s early European session.
The white metal holds a mildly bearish bias in the near term, with the RSI below the midline.
The initial support level to watch is $79.00; the first upside barrier is located at $83.00.

Lallalit Srijandorn FXStreet

Silver price (XAG/USD) holds positive ground near $79.90 during the early European session on Wednesday. Escalating tensions in the Middle East push demand toward safe-haven assets like silver.

The war has entered its third week with around 2,000 reported deaths. Iranian security chief Ali Larijani was killed in Israeli airstrikes, and Iranian army chief Amir Hatami vowed to launch a “decisive and regrettable” retaliation for the killing of a senior official.

A spike in oil prices above $100 per barrel increases global market uncertainty and adds inflation concerns. Traders scaled back their bets on US interest rate cuts, which lifted the US Dollar (USD) and weighed on the USD-denominated commodity price.

The Federal Reserve (Fed) interest rate decision will take center stage later on Wednesday, with no change in rates expected. Analysts note that traders will closely monitor the outcome of the Fed’s policy meeting for clearer signals on the future policy stance and the trajectory of precious metal prices, especially against the backdrop of persistent geopolitical tensions and fluctuating energy markets.

Technical Analysis:

In the daily chart, the near-term bias of XAG/USD is mildly bearish as price retreats from the recent peak and holds just above the rising 100-day EMA near $74.50, which now acts as the last significant dynamic support within a broader uptrend. Daily closes have slipped back inside the Bollinger envelope after rejecting the upper band in the $90.00 area, signaling that upside momentum has faded and volatility is normalizing. The RSI around 44 remains below the 50 midline, confirming soft downside pressure rather than an outright trend reversal.

Immediate support emerges at $79.00, with a decisive break exposing the recent swing low at $73.50 ahead of the 100-day EMA clustered near $74.50, where buyers would be expected to defend the broader bullish structure. On the topside, initial resistance appears at $83.00, followed by the mid-$80.00s in line with the Bollinger middle band slope, while a recovery above $88.00 would be needed to re-open a test of the $90.00 band cap and negate the current corrective tone.

(The technical analysis of this story was written with the help of an AI tool.)

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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