TRENDING:

XAU/USD

EUR/USD

Silver Price Forecast: XAG/USD gauges temporary support above $70 at the start of US NFP week

Silver price struggles to regain traction after a carnage on Friday.
Higher US Dollar due to Warsh’s nomination as new Fed chairman and profit-booking brought a bloodbath in the Silver price.
Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.

Sagar Dua FXStreet

Silver price (XAG/USD) trades cautiously at around $80 during the Asian trading session at the start of the week, slightly above the fresh four-week low of $73.33 posted on Friday. The white metal strives to regain ground after last week’s mayhem, in which it lost over 30% of its value from the lifetime highs of $121.66, triggered due to a strong US Dollar (USD), profit-booking after a stalwart rally, and expectations of a hawkish Federal Reserve’s (Fed) monetary policy outlook.

Technically higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near its weekly high of 97.33.

The Greenback attracted significant bids on Friday after the White House nominated former Federal Reserve (Fed) Governor Kevin Warsh as the successor of current Chairman Jerome Powell. Market experts believe that Warsh’s selection would not dampen Fed’s independence, which was highly anticipated, following comments from United States (US) President Donald Trump several times that new Chairman will deliver more interest rate cuts.

Fed’s newly appointed Chairman Kevin Warsh is known for supporting a strong US Dollar while doing his job previously at the US central bank, indicating that monetary conditions could remain tight going forward.

This week, investors will focus on the US Nonfarm Payrolls (NFP) data for January, which will drive market expectations for the Fed’s monetary policy outlook.

Silver technical analysis

In the daily chart, XAG/USD trades at $81.38. Price holds above the rising 50-day EMA at $79.50, maintaining the medium-term uptrend. The average’s upward slope supports the broader bias. RSI at 44 (neutral) reflects cooled momentum after an overbought stretch. A sustained hold above the average could keep buyers engaged, while a close beneath it would expose downside.

With price anchored above the 50-day EMA, pullbacks would meet initial demand near that dynamic support. RSI below 50 caps upside near term; a rebound through the midline would improve impulse. If momentum stabilizes, bulls could attempt to extend the recovery, while failure to re-accelerate would keep trade contained.

(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

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.