Silver Price Forecasts: XAG/USD bulls eye $69.00 amid an improved market mood
- XAU/USD holds previous gains and approaches the top of the weekly range, near $69.00.
- Hopes of a US-Iran peace deal and lower US yields are boosting Silver's recovery.
- Recent price action highlights a potential bullish Head & Shoulders figure.
Thursday’s EuropeanSilver (XAG/USD) retraces previous losses on Friday's European session, returning to levels in the mid-range of the $67.00s at the time of writing. A moderate optimism about a peace deal in Iran and lower US Treasury yields are buoying the yieldless precious metal on Friday, luring bulls into the $69.00 resistance area.
The white metal is drawing support from comments by US President Donald Trump, affirming that the US and Iran reached a “great settlement” for a deal that is likely to be signed “in the next days”. Iranian authorities have shown a somewhat colder stance, although the Foreign Ministry Spokesperson. Esmail Baghadei affirmed in local media that the possibility of a deal is closer than ever before.
In the US. Producer Price Index (PPI) figures, released on Thursday, were mixed. Headline inflation accelerated to its highest level in more than three years, but core inflation remained unchanged, against expectations of further growth. This has triggered hopes that the spillover from energy prices starts to ebb, pushing back hopes of Federal Reserve (Fed) rate hikes.
Technical Analysis: Potential bullish Head & Shoulders
XAG/USD is trading at $67.46, holding a constructive immediate bias. Friday's higher low hints at a potential bullish head & Shoulders (H&S) pattern, a common bottoming formation.
Indicators on intraday chats are supportive. The Relative Strength Index (RSI) in 4-hour charts hovers around the mid-50s, with the Moving Average Convergence Divergence (MACD) in positive territory, hinting at building bullish momentum.
A breach of the weekly high, at $69.03, would confirm the H&S formation and bring previous support zones at $71.05 (reverse trendline) and the $72.10 area (May 28 low) into focus. The H&S's measured target lies right ahead of the June 4 high, in the $75.00 area.
Downside attempts, on the contrary, remain contained above $65.90 (session lows), which, so far, are closing the path towards Thursday's lows at $61.50.
(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
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
