Silver Price Forecast: XAG/USD rises to near $33.00 with developing bullish bias
- Silver price may aim for a retest of the six-week high of $33.69, last seen on April 24.
- The 14-day RSI has moved above the 50 level, indicating a strengthening bullish momentum.
- Initial support is seen at the nine-day EMA of $32.71, with further support at the 50-day EMA of $32.50.
Silver price (XAG/USD) is extending its gains for the fourth successive session, trading around $33.00 per troy ounce during the Asian hours on Tuesday. Technical analysis of the daily chart indicates a bullish outlook, as the precious metal continues to trade within an ascending channel pattern.
The 14-day Relative Strength Index (RSI) has climbed above the 50 mark, signaling a developing bullish bias. Furthermore, the Silver price has broken above both the nine-day and 50-day Exponential Moving Averages (EMAs), reinforcing the strength of its short-term upward momentum.
On the upside, the XAG/USD pair may target its six-week high at $33.69, reached on April 24. A break above this level would attract buyers and support the price of the precious metal to approach the seven-month high at $34.59, last seen on March 28.
On the downside, the Silver price could test the immediate support at the nine-day EMA of $32.71, followed by the 50-day EMA at $32.50. A break below these levels could weaken the bullish bias and put pressure on the XAG/USD pair to test the eight-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.
