Silver Price Forecast: XAG/USD holds above $80.00, eyes one-month top amid bullish setup

Silver attracts fresh buyers and remains close to a nearly one-month high set on Wednesday.
The recent breakout through the 200-SMA on H4 and the 50% Fibo. level favors bullish traders.
Weakness below the key resistance breakpoints is needed to offset the near-term positive bias.

Haresh Menghani FXStreet

Silver (XAG/USD) regains positive traction during the Asian session on Thursday and climbs to a fresh daily high, around the $80.50 area in the last hour, though it lacks follow-through. The white metal remains below a nearly one-month high, touched the previous day, and currently trades just above the $80.00 psychological mark, up 1.50% for the day.

From a technical perspective, the overnight modest pullback stalled near the 50% Fibonacci retracement level of the March slide. The subsequent move up favors the XAG/USD bulls. This, along with this week's breakout above the 200-period Simple Moving Average (SMA) on the 4-hour chart, suggests that the path of least resistance for the white metal is to the upside.

Meanwhile, the Relative Strength Index (RSI) hovers near overbought territory around 69, and the Moving Average Convergence Divergence (MACD) histogram is in positive territory. This further suggests that the momentum remains constructive but also warns that the rally could soon face exhaustion.

On the topside, initial resistance is aligned with the 61.8% Fibo. retracement at $82.86, ahead of a higher barrier at the 78.6% level near $88.83 and the cycle high reference at $96.44. On the downside, immediate support is seen at the 50% retracement at $78.66, followed by the 200-period SMA at $77.49. However, deeper pullbacks would look to the 38.2% Fibo. retracement at $74.47 and the 23.6% level at $69.27 to maintain the broader bullish structure.

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

XAG/USD 4-hour chart

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

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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