Silver Price Forecast: XAG/USD retakes $72.00; not out of the woods yet
- Silver gains some positive traction during the Asian session, though the upside seems limited.
- The bearish technical setup backs the case for the emergence of fresh selling at higher levels.
- A sustained move beyond the $73.60 hurdle is needed to negate the near-term negative bias.
Silver (XAG/USD) attracts some buyers during the Asian session on Thursday and reverses a part of the previous day's losses to the $70.85 region, or over a three-week low. The white metal climbs further beyond the $72.00 mark in the last hour, though the upside potential seems limited.
The XAG/USD is holding below the 100-period Simple Moving Average (SMA) on the 4-hour chart and beneath the 38.2% Fibonacci retracement of the March-April move higher, reinforcing a bearish near-term bias. Moreover, the 14-period Relative Strength Index (RSI) around 37 stays in weak territory, while the Moving Average Convergence Divergence (MACD) indicator remains below zero with a slightly negative histogram. This, in turn, hints that downside momentum persists even as short-term bearish pressure shows signs of moderating.
Hence, any subsequent move up is likely to confront initial resistance near the $73.00 mark ahead of the $73.60 region. That said, some follow-through buying could lift the XAG/USD to the 38.2% Fibo. retracement near $74.64 en route to the 100-period SMA around $76.63 and the 23.6% retracement at about $77.85, ahead of a more distant barrier at the recent Fibonacci anchor close to $83.04.
On the downside, immediate support is aligned with the 50.0% retracement at $72.04, with additional floors seen at the 61.8% retracement near $69.45 and deeper Fibonacci supports around $65.75 and $61.05 if selling resumes.
(The technical analysis of this story was written with the help of an AI tool.)
XAG/USD 4-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.
