Silver Price Forecast: XAG/USD trades above $72.00; bears retain control below 100-day SMA

Silver attracts buyers for the third straight day, though it lacks bullish conviction.
The technical setup backs the case for the resumption of the recent downtrend.
A sustained move above the 100-day SMA is needed to negate the bearish bias.

Haresh Menghani FXStreet

Silver (XAG/USD) retreats from a four-day high, around mid-$73.00s touched earlier this Tuesday, though it sticks to positive bias for the third straight day. The white metal trades just above the $72.00 mark during the first half of the European session, up 3.0% for the day.

Looking at the broader technical picture, the near-term bias remains bearish while the XAG/USD holds well below the 100-day Simple Moving Average (SMA) around $75. The 100-day SMA continues to rise but no longer provides support, instead capping rebounds as spot Silver extends its slide toward the longer-term uptrend context defined by the 200-day Exponential Moving Average (EMA) near $63.

Meanwhile, momentum conditions reinforce downside pressure, with the Moving Average Convergence Divergence (MACD) indicator (12, 26, 9) remaining below its signal line and in negative territory as the histogram stays weak. Adding to this, the Relative Strength Index (RSI) at 41.83 sits below the 50 line, reflecting persistent selling interest rather than oversold stress, favoring the XAG/USD bears.

Initial support aligns near $69.00, guarding the recent low at $67.85, with a clear break of this band exposing the next bearish target around $63.00, where the rising 200-day EMA offers more substantial medium-term support. On the upside, immediate resistance emerges at the $75.00 area, where the 100-day SMA converges with a recent breakdown zone, and a daily close above this level would be needed to ease the prevailing bearish tone and open the way toward $80.00 as the next barrier.

Nevertheless, the path of least resistance stays to the downside, and rallies are vulnerable to renewed selling pressure as long as the XAG/USD trades below $75.00.

(The technical analysis of this story was written with the help of an AI tool.)

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

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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