Silver Price Forecast: XAG/USD remains capped below $61.00 as bulls seem hesitant
- XAG/USD reverses an intraday dip, though the upside remains capped.
- The USD retreats from an 18-month high and supports the commodity.
- The technical setup warrants caution before placing fresh bullish bets.
Silver (XAG/USD) attracts some dip-buyers in the vicinity of mid-$59.00s on Tuesday and sticks to its modest intraday gains through the early European session. The white metal, however, lacks bullish conviction and currently trades around the $60.50 area, up just over 0.30% for the day.
The US Dollar (USD) retreats from its highest level since April 2025 as bulls opt to take some profits off the table, offering some support to XAG/USD. However, the US Federal Reserve's (Fed) hawkish outlook and geopolitical uncertainties could limit deeper USD losses. Traders might also opt to wait for the release of the latest US consumer inflation figures and Fed Chair Kevin Warsh's speech on Friday for more cues about the policy path, which will drive the USD and provide a fresh impetus to the white metal.
From a technical perspective, the XAG/USD retains a bearish near-term bias beneath the 23.6% Fibonacci retracement level and the 100-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, momentum indicators suggest only modest, consolidative price action rather than a decisive bullish recovery. In fact, the Moving Average Convergence Divergence (MACD) indicator hovers slightly in positive territory with a flat read. Moreover, the Relative Strength Index (RSI) at 51.39 sits near neutral.
Meanwhile, the 23.6% Fibo. level at $61.54 could act as an initial hurdle ahead of the 100-period SMA at $61.98, which forms a nearby cap. The XAG/USD would need to clear this barrier to ease downside pressure and climb further to the 38.2% retracement at $63.38 en route to the 50.0% level at $64.87, ahead of deeper Fibonacci resistance at $66.36, $68.48 and the cycle high zone near $71.17. On the flip side, the primary structural support is the Fibonacci anchor around $58.57, where buyers could attempt to reassert a floor if the current bearish tone extends.
(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.