Silver Price Forecast: XAG/USD rebounds from multi-day low, climbs back above $32.00

Silver attracts some dip-buying on Tuesday and snaps a three-day losing streak.
The mixed oscillators on the daily chart warrant some caution for bullish traders.
Weakness below the Asian session low might expose the 100-day EMA support.

Haresh Menghani FXStreet

Silver (XAG/USD) reverses an Asian session dip to the $31.85-$31.80 region, or a four-day low, and climbs to a fresh daily high in the last hour. The white metal currently trades around the $32.15-$32.20 area, up nearly 0.20% for the day, and for now, seems to have snapped a three-day losing streak.

However, mixed technical indicators on the daily chart warrant some caution for bullish traders and positioning for a further appreciating move. Hence, any subsequent move up could face stiff resistance and remain capped near the $32.65-$32.70 region. The said hurdle might now act as a key pivotal point, which if cleared decisively could allow the XAG/USD to reclaim the $33.00 mark and climb further towards the February monthly swing high around the $33.40 area.

Some follow-through buying should pave the way for additional gains towards the next relevant hurdle near the $33.60-$33.70 area. The XAG/USD might then surpass the $34.00 round figure and extend the momentum further towards the $34.50-$34.55 resistance zone before aiming to challenge the multi-year high, closer to the $35.00 psychological mark touched in October 2024.

On the flip side, the Asian session low, around the $31.85-$31.80 region, could offer some support, below which the XAG/USD could slide to the $31.25-$31.20 area. The downward trajectory might eventually drag the XAG/USD to the 100-day Exponential Moving Average (EMA) pivotal support, currently pegged near the $31.10-$31.00 region. This is followed by the late February low, around the $30.80 area, which if broken might shift the bias in favor of bearish traders.

The subsequent downfall has the potential to drag the XAG/USD towards the $30.00 psychological mark en route to the $29.55-$29.50 support and sub-$29.00 levels, or the year-to-date low touched in January.

XAG/USD daily chart

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

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD treads water around 1.3400 as Hormuz risks lift USD

GBP/USD trades with caution around 1.3400 in European trading on Monday, away from an over three-week high, or levels just above the 1.3500 psychological mark touched on Friday. The pair faces headwinds from a modest US Dollar rebound as investors rush to safety amid renewed jitters on the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD consolidates near 1.1550 amid Mideast tensions

EUR/USD keeps its range near 1.1550 in the European session on Monday, holding the retreat from fresh highs since June 17, touched in reaction to the disappointing US jobs data on Friday. Renewed Middle East tensions lend support to the safe-haven US Dollar, capping the pair's upside attempts amid improved Eurozone sentiment data.

Gold holds gains near $4,350; remains below June 17 high

Gold reverses a modest intraday dip, and climbs to the top boundary of its daily range, closer to the $4,350 level in the European session. The commodity, however, remains below its highest level since June 17, touched on Friday, following the release of the US Nonfarm Payrolls report.

Pi Network: Mild bearish bias caps PI corrective rebound

Pi Network extends losses Monday after a bearish close the previous day, as price remains capped below the $0.1000 psychological threshold. Speculative demand for PI is low, with Open Interest holding above $9 million as broader market sentiment improves. The technical outlook for PI indicates a mild bearish bias as the $0.0961 resistance level remains intact.

US Payrolls miss – RBA on deck tomorrow

It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.