Silver Price Forecast: XAG/USD remains below $32.50, support appears at 50-day EMA
- Silver price could aim for the upper boundary of the ascending channel near $33.50.
- The 14-day RSI holding at the 50 mark reinforces the ongoing bullish bias.
- Immediate support is seen at the 50-day EMA around $32.21.
Silver price (XAG/USD) continues to show strength for the fifth consecutive session, trading around $32.30 per troy ounce during the Asian session on Tuesday. The technical analysis of the daily chart suggests a growing bullish trend, with the grey metal moving upward within an ascending channel pattern.
Silver price remains above both the nine-day and 50-day Exponential Moving Averages (EMAs), indicating strong short-term momentum. Furthermore, the 14-day Relative Strength Index (RSI) sits at the 50 level, reinforcing the active bullish bias.
On the upside, the XAG/USD pair may target the upper boundary of the ascending channel around $33.50. A decisive break above this level could strengthen the bullish outlook and pave the way for a retest of the six-month high at $34.59, last seen on March 28.
Silver price may find immediate support at the 50-day EMA near $32.21, followed by the nine-day EMA around $31.90. A break below this level could signal weakening short-term price momentum, potentially driving precious metals’ price toward the $31.50 support area. Further downside support lies at the seven-month low of $28.00, marked on April 7.
XAG/USD: Daily 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
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.
