Silver Price Forecast: XAG/USD struggles to build on intraday gains beyond $75.00
- Silver attracts buyers for the second straight day on Friday, though it lacks follow-through.
- The mixed technical setup warrants some caution before positioning for any further gains.
- A sustained strength beyond the $75.45 confluence will be seen as a fresh trigger for bulls.
Silver (XAG/USD) trades with a positive bias for the second straight day on Friday, though it struggles to capitalize on modest Asian session gains to levels just above the $75.00 psychological mark. The white metal currently trades around the $74.25 region, up 0.65% for the day, and seems poised to register modest losses for the second week in a row.
From a technical perspective, the XAG/USD now seems to have found acceptance above the 23.6% Fibonacci retracement level of the recent decline from the April swing high, around the $83.00 mark. Adding to this, the Relative Strength Index (RSI) sits around 65, pointing to firm bullish pressure but shy of overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains marginally positive, which hints that rebounds are being faded.
That said, the XAG/USD holds below the 200-hour Simple Moving Average (SMA) at $75.46. The said area coincides with the 38.2% Fibo. retracement level and should keep the near-term tone capped despite a constructive momentum backdrop. Bulls must reclaim the dense barrier to extend the recovery toward the 50% retracement at $76.97 and the 61.8% level at $78.40.
On the downside, immediate support is seen at the 23.6% Fibo. retracement at $73.78. A convincing break below this floor would expose the cycle low area at $70.93, where stronger buyers could look to re-emerge.
(The technical analysis of this story was written with the help of an AI tool.)
XAG/USD 1-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.
