Silver shudders, XAG/USD tumbles 13% as metals rout continues

Spot Silver prices found fresh room on the downside on Thursday.
A general rotation out of risk is pelting overextended Silver markets.
A 13% decline on Thursday adds to a 40% top-to-bottom decline in XAG/USD.

Joshua Gibson FXStreet

Spot Silver markets took a fresh beating on Thursday, with XAG/USD tumbling 13% in a single day. Intraday Silver bids have been pushed back onto the bottom end of a 40% peak-to-trough decline that dragged Silver prices sharply down from record highs posted at $121.66 just last week.

Risk-off market sentiment hammers metals

Silver prices are following a broad-market trend into the red on Thursday as global investor sentiment rotates into a firm risk-off stance. Silver tanked 13%, pushing XAG/USD back below $76.00 after a brief, half-hearted rebound earlier in the week from fresh lows in the $72.50 region.

XAG/USD daily chart

Silver price forecast

In the daily chart, XAG/USD trades at $75.90. The 50-day EMA has flattened and now caps price, with dynamic resistance at $79.81. The 200-day EMA continues to rise and underpins the broader trend with primary support at $55.75. The Stochastic (14,5,5) slides to 21.20, nearing oversold and indicating fading downside momentum.

A recovery through the 50-day EMA at $79.81 would reassert the bullish bias and open scope for trend continuation. Failure to reclaim that barrier would keep pressure in place, while the rising 200-day EMA at $55.75 would be expected to absorb deeper pullbacks. A turn higher in the Stochastic from its depressed reading would strengthen the case for a rebound; a further drop into oversold could extend consolidation before traction emerges.

(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

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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