Silver Price Forecast: XAG/USD moves away from one-week low, climbs to $77.50
- Silver shows some resilience below the 200-SMA on H4 and regains some positive traction.
- The broader technical setup warrants some caution before positioning for further upside.
- A move beyond 23.6% Fibo. is needed to back the case for the resumption of the uptrend.
Silver (XAG/USD) attracts some buyers during the Asian session on Wednesday and moves away from a one-week low, around the $75.50 region, which it touched the previous day. The white metal currently trades near mid-$77.00s, up just over 1% for the day, though the mixed technical setup warrants caution before placing aggressive directional bets.
The XAG/USD holds just above the 200-period Simple Moving Average (SMA) on the 4-hour chart but is capped by the 23.6% Fibonacci retracement of the recent goodish recovery from the $61.00 mark, or the March swing low. This leaves the near-term tone neutral to slightly bearish. The modest cushion provided by the 200-SMA suggests underlying demand on dips.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator remains below zero with a negative reading, and the Relative Strength Index (RSI) hovers near 44. Both the momentum indicators hint that recovery attempts may struggle while the XAG/USD trades under the nearby Fibonacci barrier.
A sustained strength beyond the 23.6% retracement at $77.76 should pave the way for additional gains. Further upside hurdles, however, only emerge toward the cycle high reference at $82.90. On the downside, initial support is seen at the 200-period SMA at $76.58, followed by a more substantial Fibonacci cluster at the 38.2% retracement near $74.59.
A convincing break below the latter would expose deeper supports at $72.02 and $69.46, corresponding to the 50.0% and 61.8% retracements of the broader upswing.
(The technical analysis of this story was written with the help of an AI tool.)
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.
