Silver Price Forecast: XAG/USD struggles around $73.50; vulnerable while below 200-EMA
- Silver attracts some follow-through selling and moves further away from the weekly high.
- The technical setup favors bearish traders and backs the case for a further near-term fall.
- A move beyond the 200-period hurdle on the H4 is needed to negate the negative outlook.
Silver (XAG/USD) is seen extending the previous day's modest pullback from the weekly high and drifting lower during the Asian session on Thursday. The white metal currently trades just below mid-$73.00s, down 2.0% for the day, and seems vulnerable to slide further.
The overnight failure ahead of the 200-period Exponential Moving Average (EMA) pivotal hurdle on the 4-hour chart and a subsequent weakness below the 38.2% Fibonacci retracement of the March downfall favor the XAG/USD bears. Moreover, the Relative Strength Index (RSI) at 48.18 sits close to neutral, while the Moving Average Convergence Divergence (MACD) has slipped marginally below zero with a softening histogram. This hints that upside momentum is fading rather than building for an immediate recovery.
On the topside, initial resistance is located at the 38.2% Fibo. retracement at $74.53, with the 200-period EMA on the 4-hour chart at $76.76 reinforcing a cap ahead of the 50.0% retracement at $78.68. On the downside, the 23.6% Fibo. retracement at $69.41 could offer the first notable support, ahead of a more substantial structural floor near the cycle low at $61.12.
(The technical analysis of this story was written with the help of an AI tool.)
XAG/USD 4-hour 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
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
