Silver Price Forecast: XAG/USD holds losses near $57.50 due to prevailing bearish bias
- Silver price could find immediate support at nearly seven-month low of $55.63.
- An oversold RSI near 27 suggests downside pressure is stretched but has not yet reversed.
- XAG/USD may find the primary barrier at the nine-day EMA of $62.89.
XAG/USD remains weaker for the third consecutive day, trading around $57.40 per troy ounce during the European hours on Thursday. The technical analysis of the daily chart shows that the spot price is moving downwards within the descending channel pattern, indicating a prevailing bearish bias.
The XAG/USD pair is extending its slide beneath the short- and medium-term trend metrics as the nine-period and 50-period Exponential Moving Averages (EMAs) now act as overhead resistance. The setup maintains a clear bearish near-term bias, while the 14-day Relative Strength Index (RSI) hovering around 27 in oversold territory suggests downside pressure is stretched but not yet reversed.
Silver price could test the immediate support at nearly seven-month low of $55.63, recorded on June 24, followed by the lower boundary of the descending channel around $55.00.
On the upside, the primary barrier lies at the nine-day EMA of $62.89, followed by the upper boundary of the descending channel around $68.60. Further advances above the channel would cause the bullish reversal and lead the XAG/USD pair to test the 50-day EMA at $71.46.
(The technical analysis of this story was written with the help of an AI tool.)
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
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
