Silver Price Forecast: XAG/USD rises toward $3800 on US Dollar slide
- Silver (XAG/USD) gains 0.39% to $37.88 amid broad US Dollar weakness; DXY drops over 0.50%.
- Market sentiment lifted by corporate earnings and Apple–Trump joint $100B investment announcement.
- Trump threatens 100% tariffs on foreign-made chips, exempts US-based production.
Silver Price advances during the North American session, up by 0.39% as the Greenback weakens more than 0.50%, as revealed by the US Dollar Index (DXY). At the time of writing, the XAG/USD trades at $37.88 after hitting a low of $37.31.
Sentiment improved due to earnings and Trump’s threat to impose 100% duties on chips. However, an exemption was made for companies producing items in the US, as Apple CEO and Trump announced a fresh $100 billion investment in the country.
XAG/USD Price Forecast: Technical outlook
From a technical perspective, the Silver price is neutral-biased, from a price action point of view, capped on the upside by the 20-day SMA at $38.04. However, sentiment turned slightly bullish, as seen by the Relative Strength Index (RSI), which cracked the index neutral line three days ago.
If XAG/USD ends daily above the 20-day SMA, look for a rally toward $39.00. Further resistance lies above, with the July 25 high of $39.19, followed by the YTD peak at $39.52.
Conversely, if XAG/USD finishes the session below $38.00, this could prompt sellers to drive the grey metal below he August 5 daily low of $37.31, sponsoring a slide towards $37.00. On further strength, the grey metal could reach the 50-day SMA at $36.73.
XAG/USD Price Chart – Daily
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
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
