Silver Price Forecast: XAG/USD retakes $85.00; bearish risks persist
- Silver attracts some buyers during the Asian session and snaps a two-day losing streak.
- The mixed technical setup warrants caution before positioning for any further move up.
- A break below a short-term ascending trend line will be seen as a key trigger for bears.
Silver (XAG/USD) gains some positive traction during the Asian session on Friday and climbs back above the $85.00 mark in the last hour. The white metal, for now, seems to have snapped a two-day losing streak, though it remains on track to end the week on a flattish note.
From a technical perspective, the XAG/USD holds under the descending 200-period Simple Moving Average (SMA) on the 4-hour chart. This keeps sellers in control despite the Relative Strength Index (RSI) recovering toward the neutral 48 area, which suggests only modest downside momentum. Moreover, the Moving Average Convergence Divergence (MACD) indicator stays below the signal line and under the zero mark, with a negative histogram that reinforces the view of prevailing bearish pressure rather than an established base.
However, it will still be prudent to wait for a convincing break and acceptance below the longstanding rising support trend line before placing aggressive bearish bets around the XAG/USD. A failure would invite a deeper pullback toward $82.00, followed by $80.00 as the next significant level.
On the upside, initial resistance emerges at the 200-period SMA near $85.70, and a sustained break above this area would open the way toward last week’s highs around $87.00 and then $88.50. As long as XAG/USD trades below $85.70, rallies are vulnerable to selling pressure, while a recovery above that barrier would be needed to neutralize the current bearish tone.
(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.
