Silver Price Forecast: XAG/USD tests nine-day EMA near $33.50

Silver price tests immediate support around the nine-day EMA at the $33.60 level.
The 14-day RSI remains above the 50 mark, suggesting the bullish outlook prevails.
Silver price may explore the region around the upper boundary of the ascending channel at $35.10.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) continues to decline, trading at around $33.60 during the European session on Thursday. Analysis of the daily chart indicates a bullish bias, as Silver price consolidates within an ascending channel.

Furthermore, the 14-day Relative Strength Index (RSI) remains above the 50 mark, supporting the prevailing bullish outlook. However, a decline below 50 could signal a shift toward bearish sentiment.

However, the Moving Average Convergence Divergence (MACD) line is positioned above the signal line, indicating a potential bearish signal. A bearish crossover could suggest a shift in momentum from bullish to bearish, signaling a possible sell opportunity. Nonetheless, since both lines remain above the centerline (zero line), this suggests that the overall trend remains bullish.

On the upside, the Silver price may target the psychological level of $35.00, followed by the upper boundary of the ascending channel at $35.10. A breakout above this level could propel the price of the grey metal toward the psychological level of $36.00.

Regarding support, Silver price is testing the nine-day Exponential Moving Average (EMA) at $33.60, with the 14-day EMA at $33.27 serving as the next support level. A drop below this latter level could increase selling pressure, potentially pushing XAG/USD down to the lower boundary of the ascending channel around the psychological level of $33.00.

XAG/USD: Daily Chart

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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