Silver Price Forecasts: XAG/USD retraces losses and rallies beyond $63.50

Silver bounced from $60.81 before retracing losses, returning to levels near $63.80.
Fresh concerns about China have soured investors' sentiment and provided support to precious metals
XAG/USD's trend remains bullish with the channel top, at the $66.00 area, in focus.

Guillermo Alcala FXStreet

Silver’s (XAG/USD) appreciates more than $2 so far on Monday, reaching intra-day gains near $63.80 and approaching the fresh all-time highs at $63.65, after bouncing from lows near right below the $61.00 line on Friday.

Precious metals are trading on a firm tone on Monday, fuelled by a cautious market mood following soft data from China and fresh concerns about the country’s property sector amid news that the state-owned developer, China Vanke, is on the brink of bankruptcy.

Beyond that, US President Trump has pointed to former Fed Governor Kevin Warsh as the best positioned to replace Chairman Powell at the end of his term in May. Trump also said, in an interview with the Wall Street Journal, that the next Fed chair will have to listen to him when deciding about monetary policy, which points towards further monetary easing next year.

Technical Analysis: Silver has an important support at the $61.00 area

The 4-hour chart shows the XAG/USD pair trading at $63.73, above 3% above the day’s open. The Relative Strength Index (RSI) at 64 stays above its midline, keeping momentum positive without overbought conditions. The Moving Average Convergence Divergence (MACD), on the other hand, has slipped below zero, reinforcing a cautious tone.

The pair keeps trading within a rising channel from mid-November lows at $48.57, with bulls aiming for Friday's high, at $64.66, and the top of the channel, now in the area of $66.00. Further up, the 70.00 psychological level emerges as the next target.

On the downside, the area between trendline support now around $61.45 and Friday's low, at $60.80, is likely to pose a significant challenge for bears. A confirmation below here would open the path towards the October 7, 8, and 9 lows, in the area of $57.60.

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

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

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.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold remains vulnerable, targets $4,100

Gold retreats for the fourth consecutive day on Monday, targeting the key $4,100 mark per troy ounce. The precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.