Silver Price Forecast: XAG/USD finds cushion near $56.60, eyes on US JOLTS Job Openings data
- Silver price rebounds from $56.60; downside remains likely amid firm hawkish Fed bets.
- The Fed is expected to deliver at least one interest rate hike this year.
- Investors await the US JOLTS Job Openings data for May.
Silver price (XAG/USD) attracts slight bids after falling to near $56.60 in the Asian session on Tuesday, but is still 1.55% down to near $57.40 at press time. The white metal remains under pressure amid firm expectations that the next monetary policy move by the Federal Reserve (Fed) this year will be on the upside.
According to the CME FedWatch tool, there is an almost 80% chance that the Fed will deliver at least one interest rate hike this year.
Higher interest rates by the Fed bode poorly for non-yielding assets, such as Silver.
Meanwhile, investors await the United States (US) JOLTS Job Openings data for May, which will be released at 14:00 GMT. The data is expected to show that employers posted 7.3 million fresh jobs, lower than 7.618 million in April.
This week, the major trigger for the Silver price will be the US Nonfarm Payrolls (NFP) data for June, which will be released on Thursday.
Investors will pay close attention to employment-related data this week, as comments from new Fed Chairman Kevin Warsh signaled that forward-looking statements from the central bank are not “well suited to the current policy conjuncture”.
Silver technical analysis
XAG/USD trades lower at around $57.40, extending its slide well below the 20-day exponential moving average (EMA) at $64.57 and preserving a bearish near-term bias.
The distance between spot and the EMA hints at persistent selling pressure, while the Relative Strength Index (RSI) at 30.23 hovers just above oversold territory, suggesting that downside momentum remains dominant but is approaching exhaustion levels.
On the topside, initial resistance is located at the March 23 low at $61.01, followed by the 20-day EMA around $64.57, which would need to be reclaimed to ease the current bearish tone and signal a more sustained recovery attempt. On the downside, the October 16 high at $54.86 is the immediate support level; a breakdown below the same would expose the Silver price to $50.00.
(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.