Silver Price Forecast: XAG/USD slumps below $73.00 under 100-day EMA as downside pressure persists
- Silver price falls to around $72.85 in Tuesday’s Asian session.
- The precious metal maintains a negative outlook below the 100-day EMA, with bearish RSI momentum.
- The first upside barrier emerges at $74.45; the initial support level is seen at $71.15.
Silver price ( XAG/USD) tumbles to near $72.85 during the Asian trading hours on Tuesday. The white metal remains under selling pressure amid intensifying tensions in the Middle East. Reports of Iranian attacks on vessels in the Strait of Hormuz boost crude oil prices, fueling inflation fears.
This has led to expectations that the US Federal Reserve (Fed) may keep interest rates elevated for longer, making non-yielding assets like silver less attractive. Minneapolis Fed President Neel Kashkari said on Sunday that further rate hikes cannot be ruled out, particularly as inflation risks remain elevated due to rising energy prices linked to the Iran conflict.
Technical Analysis:
In the daily chart, XAG/USD keeps a bearish near-term bias as spot holds below the 100-day Exponential Moving Average (EMA) and the Bollinger Bands 20-day simple moving average (SMA). The Relative Strength Index (14) around 44 shows subdued bearish momentum rather than capitulation, suggesting downside pressure persists but without an oversold signal that would hint at an imminent, strong rebound.
On the topside, initial resistance is located at the 100-day EMA at $74.45, followed by the Bollinger midline at roughly $76.00, while the upper Bollinger Band near $80.85 marks a more distant cap in the event of a sharper short-covering bounce. On the downside, the May 4 low of $72.20 offers the first notable support. A decisive break below this level would expose the lower Bollinger Band at about $71.15.
(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
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
