Silver Price Forecast: XAG/USD slips as US yields rebound, hovers below $32.50
- XAG/USD capped at $32.73 (50-day SMA), supported by 100-day SMA near $31.88 amid choppy trade.
- RSI flat near neutral; a break above $33.00 is needed to turn bias bullish toward $33.50–$34.51
- A drop below $32.00 may expose $31.65 and the 200-day SMA at $31.23 as bearish pressure builds.
Silver prices edged lower on Friday, with losses of over 1%, set to end the week on a negative note amid rising US Treasury yields, which staged a comeback late during the North American session. XAG/USD trades at $32.26 after hitting a daily peak of $32.68 at the time of writing.
XAG/USD Price Forecast: Technical outlook
XAG/USD consolidated within the 50 and 100-day Simple Moving Averages (SMAs) at $32.73 and $31.88, respectively, over the last five days, with no apparent bias as depicted in the daily chart. The Relative Strength Index (RSI), although bearish, remains flat near the 50-neutral line, flat.
This confirms the grey metal's lack of direction, but buyers could regain control if they clear a downslope trendline drawn from the March 28–April 25 peaks, which could be broken near $33.00. A breach of the latter will expose $33.50, followed by the $34.00 mark. Once surpassed, the next stop would be the October 30 peak at $34.51.
Conversely, if XAG/USD falls below $32.00, the first support would be the 100-day SMA, followed by the May 15 low of $31.65. Once this level is cleared, the next stop would be the 200-day SMA at $31.23, followed by the $31.00 figure.
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.
