Silver Price Forecasts: XAG/USD hits highs near $77 amid a moderate risk appetite
- XAG/USD retraces previous losses on Tuesday and hits session highs at $76.90
- Investors remain hopeful of a negotiated end to Iran's war, which keeps USD rallies limited.
- Technically, the pair remains trapped within the last two weeks' range
Silver (XAG/USD) appreciates on Tuesday, retracing losses from the previous two trading days and reaching session highs near $77.00. News of a ceasefire in Lebanon has lifted market sentiment, although it remains fragile amid conflicting messages from Iran’s conflict.
Lebanon announced a partial ceasefire between Israel and Hezbollah on Monday, and US President Trump affirmed that Israeli Prime Minister Benjamin Netanyahu agreed to freeze his plans to attack Beirut. Previously, Tehran had announced the suspension of talks with the US, although Trump maintained that indirect negotiations between the two parties continue at a “rapid pace.”
On the macroeconomic front, US manufacturing data released on Monday was Dollar-supportive, but investors remain hopeful of a negotiated end to the war, which keeps US Dollar rallies limited. Later on Tuesday, the US JOLTS Job Openings will set the tone for a batch of labour releases this week, ending on Friday with the US Nonfarm Payrolls report.
Technical Analysis: Key resistance is at the $79.00 area
From a technical point of view, XAG/USD keeps going through a choppy consolidation, although momentum indicators show a positive immediate bias. The 4-hour Relative Strength Index (RSI) has popped up above the 50 level, and the Moving Average Convergence Divergence (MACD) remains at levels right above zero.
Bulls are struggling to find acceptance above the $76.70 resistance area (May 29 high), which, so far, is closing the path to the key resistance area right ahead of $79.00, where the May 19, 24, and 25 highs meet the 38.2% Fibonacci retracement of the mid-May sell-off.
On the downside, immediate support is at Monday's low of $73.85, ahead of May's bottom at $71.85 and the April 30 low at $70.86.
(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.
