Silver Price Forecast: XAG/USD hangs near eight-week low; bears retain control near $61.00
- Silver struggles to capitalize on the previous day’s modest bounce from its lowest level since August.
- Traders now look forward to the crucial US PCE Price Index and the Q2 GDP print for a fresh impetus.
- The technical setup seems tilted in favor of bearish traders and backs the case for further depreciation.
Silver (XAG/USD) attracts some sellers near the $61.75 area during the Asian session on Wednesday, stalling the previous day's recovery from the $60.30 region, or the lowest level since August 5. The white metal currently trades near the $61.00 mark, down around 0.70% for the day, as traders now look to the US Personal Consumption Expenditures (PCE) Price Index and the final US Q2 GDP print for a fresh impetus.
From a technical perspective, the XAG/USD maintains a bearish near-term bias beneath the $62.20-$62.25 horizontal support breakpoint and the 200-period Exponential Moving Average (EMA) on the 4-hour chart at $64.28. Meanwhile, the Moving Average Convergence Divergence (MACD) has just turned marginally positive, hinting at only tentative recovery attempts. However, the Relative Strength Index (RSI) around 35 stays in weak territory, reinforcing the idea that downside pressure still dominates despite the recent bounce from sub-$61.00 levels.
This, in turn, suggests that any rebounds could remain shallow and confront stiff resistance near the $61.80-$61.85 area ahead of the $62.00 mark and the $62.20-$62.25 support-turned-hurdle. The latter should act as a key pivotal point, and a sustained move beyond should pave the way for a move towards testing the 200-period EMA at $64.28. Bulls would need to reclaim it to ease the current bearish structure and open the door toward higher levels.
On the downside, the recent price troughs near $60.30 could be the first area where buyers have been attempting to stabilize. This is followed by the $60.00 psychological mark, which, if broken, should pave the way for a fall to the $59.40-$59.35 support before the XAG/USD slides further towards the $59.00 mark. If the metal extends its decline, bears might then aim to challenge the August monthly low, around the $56.60-$56.55 zone, with some intermediate support near the $57.00 round figure.
(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.
