Silver Price Forecast: XAG/USD flirts with trading range support, holds above $51.00
- Silver trades with a mild negative bias on Thursday, though it lacks follow-through selling.
- The range-bound price action below the 100-EMA on the 4-hour chart favors bearish traders.
- A sustained move above the $53.15-$53.20 hurdle is needed to negate the negative bias.
Silver (XAG/USD) edges lower following the previous day's two-way price swings, retesting the weekly trough around the $51.20-$51.15 area, during the Asian session on Thursday. The white metal, however, lacks follow-through selling and currently trades around mid-$51.00s, down less than 0.50% for the day.
From a technical perspective, the XAG/USD remains under clear bearish pressure following the recent repeated failures to make it through the 100-period Exponential Moving Average (EMA) on the 4-hour chart. The said barrier at $53.17 coincides with the top boundary of a one-week-old range and should act as a key pivotal point for short-term traders.
Meanwhile, the Relative Strength Index near 44 and the Moving Average Convergence Divergence (MACD) indicator in negative territory hint at subdued bullish momentum rather than an immediate reversal. Hence, some follow-through selling below the trading range support near the $51.00 mark is needed to back the case for any further depreciating move.
The XAG/USD might then fall to levels below the $50.00 psychological mark en route to the next relevant support near the $49.00 round figure and a one-year low, around the $48.65-$48.60 region, touched last Tuesday. On the top side, the $53.15-$53.20 area forms the first significant hurdle that bulls would need to reclaim to ease the current bearish bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 4-hour chart
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.