Silver Price Forecasts: XAG/USD rallies past $76.00 amid US Dollar weakness
- Silver reaches session highs above $76.00 after bouncing from lows near $72.00.
- Hopes of an upcoming peace deal in Iran have sent the US Dollar tumbling.
- XAG/USD is likely to be on a C_D leg of a Gartley pattern, aiming for the $80.00 area.
Silver (XAG/USD) rallies on Wednesday to erase the previous two days' losses and reaches session highs above $76.00 at the time of writing, favoured by the US Dollar's weakness. Comments from US President Donald Trump hinting at the end of the war in Iran have boosted market sentiment, providing a fresh impulse for precious metals.
Trump announced on Wednesday a pause on the efforts to escort vessels through the Strait of Hormuz and claimed “great progress” in the peace negotiations with Tehran. On Tuesday, the US Secretary of State Marco Rubio affirmed that the objectives of the military operations in Iran have been achieved and that the offensive stage is over.
Technical analysis: XAG/USD recovery might reach the $80.00 area
From a technical perspective, XAG/USD's higher low this week and Wednesday's impulsive bullish candle on the daily chart, if confirmed, would suggest that the precious metal is ready for a trend reversal.
Momentum conditions back the positive tone, with the Relative Strength Index (RSI) hovering above 60 and the Moving Average Convergence Divergence (MACD) turning increasingly positive, which together suggest buyers retain control as long as price stays north of the recent floor.
Bulls are likely to meet resistance at the $77.00 area (May 1 high), but recent price action hints at a Gartley pattern formation, which might be headed beyond the April 22 high, near the 78.70 area, targeting the April 20 highs, right above the $80.00 level, which is the 78.2% Fibonacci retracement of the late April sell-off.
On the downside, a reversal below Tuesday's low at $72.17 would negate this view and shift the focus towards the early April lows near $68.30.
(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.
