Silver Price Forecast: XAG/USD retreats after reaching fresh record highs near $109.50
- Silver price hit a fresh high of $109.46 on Monday amid persistent bullish bias.
- The trend structure remains intact, with the gap between the nine- and 50-day EMAs continuing to widen.
- The 14-day Relative Strength Index stays above 70, signaling strong upside momentum while reflecting stretched momentum.
Silver price (XAG/USD) extends its gains for the third successive session, trading around $108.80 per troy ounce during the Asian hours on Monday. The XAG/USD pair hit a fresh high of $109.46 amid persistent bullish bias, indicated by the technical analysis of the daily chart timeframe, as the price of the precious metal rises within the ascending channel pattern.
Silver price remains firmly above the rising 50-day Exponential Moving Average (EMA), with price sustaining a clear premium over both. The short-term slope has steepened, underscoring trend acceleration. Trend structure stays intact as the spread between the nine- and 50-day EMAs widens, though a flattening of the former would flag fading impetus.
The 14-day Relative Strength Index (RSI) at 80.24 (overbought) reflects stretched momentum. RSI remains above 70, keeping upside momentum dominant but raising risk of a volatility pause to relieve extremes.
While momentum is extended, the bullish bias would persist while holding above the near-term average and near the upper ascending channel boundary around $110.00.
Initial support aligns with the nine-day EMA at $96.32, followed by the lower boundary of the ascending channel around the psychological level of $96.00. Pullbacks within this context would be treated as corrective as long as the longer average continues to rise, while the 50-day EMA at $74.67 offers a deeper cushion.
(The technical analysis of this story was written with the help of an AI tool.)
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.
