Silver Price Forecasts: XAG/USD picks up to $75.00 amid geopolitical tensions
- Silver has reached the $75.00 area after bouncing from lows at the $70.40 area.
- The thin year-end liquidity is triggering sharp fluctuations in precious metals.
- XAG/USD’s bulls are likely to find significant resistance above $75.00.
Silver (XAG/USD) is trimming losses on Tuesday after depreciating beyond 7% amid Monday’s thin liquidity conditions. The escalating tensions in diverse regions of the world, coupled with market expectations that the Fed minutes will cement hopes of further monetary easing in 2026, are providing support to precious metals on Tuesday.
Moscow announced the revision of its stance on the peace talks with Ukraine after an alleged drone attack on one of President Vladimir Putin’s residences, while in the South East China Sea, military drills around Taiwan extend for the second day. Beyond that, US President Trump has threatened another attack on Iran.
Apart from that, the minutes of the last Federal Reserve meeting, due later today, are expected to reflect a wide divergence within the monetary policy committee, and feed hopes that the bank might lower borrowing costs beyond the 25 basis pòints projected in the Dot Plot.
Technical Analysis: Silver might find resistance around $76.50
In the 4-hour chart, XAG/USD trades at $75.65, after having bottomed at $70.53 on Monday. The rising 50-period Simple Moving Average (SMA), near $70.89, held bears on Monday and keeps the broader upside trend in play.
Oscillators, however, are mixed. The Moving Average Convergence Divergence (MACD) line remains below the Signal line and under the zero mark, while the Relative Strength Index (RSI) has returned to bullish territory above the key 50 line.
The bearish engulfing pattern in the daily chart is a negative sign that might anticipate a deeper correction. Resistances are at the $76.50 intra-day level, ahead of the $80.00 psychological level and the all-time high, at $85.87.
On the downside, the mentioned 50-period SMA and Monday's low at $70.53 are likely to provide support on a potential bearish reversal. Further down, the December 18 low, near $64.75, will come into focus.
(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.
