Silver Price Forecast: XAG/USD hovers around $94.50 after pulling back from fresh highs

Silver price hit a fresh all-time high of $94.76 on Tuesday.
The 14-day RSI at 72.81 signals stretched momentum and potential consolidation.
The nine-day EMA is rising sharply below the XAG/USD, offering initial support.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) inches lower after hitting a fresh record high of $94.76, currently trading around $94.20 per troy ounce during the European hours on Tuesday. Daily chart technical analysis shows the precious metal trading higher within an ascending channel, signaling a sustained bullish bias.

The 14-day Relative Strength Index (RSI) at 72.81 is overbought, flagging stretched momentum that could prompt consolidation. Additionally, the nine-day Exponential Moving Average (EMA) rises steeply and sits below the price, providing initial support. The 50-day EMA trends higher, reinforcing the medium-term uptrend.

Stability above the short- and medium-term averages would keep the bullish sequence intact and lead the Silver price to test the upper boundary of the ascending channel around $96.90, followed by the psychological level of $97.00

Above the rising nine-day EMA at $88.59, the bias stays higher, though near-term rallies could stall until momentum resets. A pullback would be expected to hold above the lower ascending channel boundary around $80.10. A break beneath the channel could shift risk toward a broader correction around the 50-day EMA at $70.23.

(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

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.

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