Silver Price Forecast: XAG/USD reaclims $33.00 on weak US jobs data boosting haven demand
- Silver rises over 1%, with bullish momentum building; key resistance at $33.69 eyed for breakout confirmation.
- Disappointing US labor data sparks renewed interest in silver as a defensive asset.
- Buyers must clear $33.69 to target $34.58 and March high near $35.00.
- Daily close below $32.90 would shift bias bearish, exposing key SMAs as downside targets.
Silver price advanced more than 1% on Thursday, climbing back above $33.00 as demand for safe-haven metals increased following the release of weak US jobs data. At the time of writing, the XAG/USD trades at $33.31.
XAG/USD Price Forecast: Technical outlook
Silver price consolidates for the third straight day, capped on the upside by resistance at $33.69 at the May 22 peak and on the downside by the 50-day Simple Moving Average (SMA) at $32.70.
Momentum suggests that buyers are in control, as indicated by the Relative Strength Index (RSI). However, they must clear $33.69, which could pave the way for a challenge of $34. On further strength, XAG/USD's next resistance level would be the March 26 high at $34.58, followed by $35.00.
For a bearish continuation, XAG/USD needs to achieve a daily close below the May 23 swing low of $32.90. In that outcome, the next test would be the 50-day Simple Moving Average (SMA) at $32.73. A decisive break will expose the 100-day SMA at $32.11, followed by the 200-day SMA at $31.40.
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.
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
