Silver Price Forecast: XAG/USD rises to near 80.50 as bullish bias prevails

Silver prices may climb toward the ascending channel's upper limit at $87.10.
An RSI reading near 59 indicates healthy bullish momentum.
The immediate support lies around the nine-day EMA at $77.34.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) gains ground for the fourth consecutive day, trading around $80.40 per troy ounce during the European hours on Monday. The technical analysis of the daily chart timeframe shows that the white metal price is moving within the ascending channel pattern, suggesting an ongoing bullish bias.

The white metal holds above both the nine-period and 50-period Exponential Moving Averages (EMAs), which now underpin a constructive near-term bias, while the 14-day Relative Strength Index (RSI) is hovering just below the overbought band around 59, suggesting positive but not yet overstretched momentum.

Silver price may rise toward the upper boundary of the ascending channel around $87.10. A break above the channel would support the metal price to test the three-month high of $96.62, reached on March 2. Further advance would expose the all-time high of $121.66, which was recorded on January 29.

On the downside, the silver price may find immediate support around the nine-day EMA at $77.34, followed by the 50-day EMA of 76.99. Further support lies at the lower ascending channel boundary around $74.50. A break below the channel would cause the bearish emergence around the five-month low of $61.01, which was recorded on March 23.

(The technical analysis of this story was written with the help of an AI tool.)

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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.

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