- Silver gains 0.19%, stabilizing at $31.89 as traders anticipate key U.S. inflation figures and Fed's next steps.
- Technical analysis highlights consolidation near the $32 mark, with $31.75 acting as crucial support.
- Potential downside risks include a fall towards the $31.00 area and the 100-day SMA at $30.47 if bearish pressure mounts.
Silver price climbed some 0.19% on Tuesday yet failed to clear the $32.00 hurdle after hitting a three-week high of $32.27 at the beginning of the week. At the time of writing, XAG/USD trades at $31.89 as Wednesday’s Asian Pacific session commences.
Mounting speculation about a potential Federal Reserve interest rate cut next week is driving market sentiment. The release of US inflation data on Wednesday is expected to provide clearer insights into the Fed’s monetary policy trajectory.
XAG/USD Price Forecast: Technical outlook
After briefly climbing above $32.00, XAG/USD retreated and is now consolidating within the $31.75–$32.00 range, with the 50-day Simple Moving Average (SMA) at $31.75 serving as key support.
The price action suggests the formation of a "double bottom" chart pattern, which remains just short of its minimum target of $33.50. A decisive break above the $32.00 resistance level could strengthen bullish momentum, paving the way toward $33.00 and ultimately the "double bottom" target.
On the other hand, if XAG/USD falls below the 50-day SMA, sellers may gain control, potentially driving prices toward the low $31.00 range. A further decline past this level could bring the 100-day SMA at $30.47 into focus.
XAG/USD Price Chart – Daily
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Gains capped by 0.6300 so far
AUD/USD succumbed to the selling pressure and receded to the 0.6230 zone after briefly piercing the key 0.6300 hurdle on the back of a choppy session in the US Dollar.
EUR/USD looks bid and near 1.0400
EUR/USD extended its weekly recovery and revisited the area above the 1.0400 level, although the move lacked follow through, with the pair eventually slipping back to the 1.0380 region in the wake of the closing bell on Wall Street.
Gold picks up pace above $2,900, Dollar weakens further
Extra selling bias in the Greenback now prompts Gold prices to regain the $2,900 mark per ounce troy and above despite the steady climb in US yields across the board.
BNB price enters 7-day winning streak as Binance liquidates over $5.9 billion from BTC, ETH and SOL holdings
Binance Coin (BNB) price surged past $650 on Wednesday, marking a 15% increase over seven consecutive days of profit. Market reports suggest that recent trades executed by Binance’s parent company could drive further BNB price gains.
How the European Union could counter US tariffs
With Trump ordering a 25% import tax on all steel and aluminium entering the US, trade tensions are inching closer to Europe. We take a closer look at how European policymakers could react. Spoiler alert: it's complicated.
The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.