Silver Price Forecast: XAG/USD retakes $52.00 as bulls seem hesitant ahead of US NFP
- Silver reverses an Asian session slide, stalling the overnight pullback from a one-week high.
- The intraday recovery lacks follow-through as traders seem hesitant ahead of the US NFP.
- The mixed technical setup further warrants some caution before placing directional bets.
Silver (XAG/USD) attracts some buyers near the $51.25 region during the Asian session on Friday, stalling the previous day's retracement slide from the vicinity of mid-$53.00s, or a one-week high. The white metal retakes the $52.00 mark in the last hour, though the upside seems limited as traders await the release of the crucial US Nonfarm Payrolls (NFP) report before placing directional bets.
From a technical perspective, XAG/USD showed some resilience below the $51.70-$51.65 confluence – comprising the 100-hour Exponential Moving Average (EMA) and the 50% Fibonacci retracement level of the recent downswing from late October. The said area offers immediate underlying support and hints at ongoing consolidation rather than a decisive trend amid mixed momentum indicators.
In fact, the Relative Strength Index (RSI) is near 46, and the Moving Average Convergence Divergence (MACD) is below zero, suggesting that bullish pressure has faded but sellers lack clear dominance for now. Hence, any subsequent move up could face initial resistance at the 61.8% Fibo. retracement at $52.34, ahead of a higher barrier at the 78.6% retracement near $53.35 and the recent cycle high of $54.64.
On the downside, a close back below the clustered support formed by the 100-period EMA and the 50.0% retracement, around the $51.70-$51.65 region, would expose the 38.2% level at $50.92, with deeper bearish pressure likely bringing the 23.6% retracement at $50.04 into view.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 1-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.
