Silver Price Forecasts: XAG/USD resumes its uptrend, with bulls aiming for $67.17
- XAG/USD found buyers at the $64.20 area on Tuesday to return above $66.00.
- The precious metal resumes its near-term bullish trend ahead of US Inflation data,
- Above $67.15, the next bullish target emerges at the $71.50 area.
Silver (XAG/USD) has returned to levels a few cents above $66.00 on Wednesday’s European session after finding support at the $64.20 area on Tuesday. The precious metal keeps the bullish trend from early August lows in the mid-$56.00s range, with bulls aiming for the $67.15 resistance area ahead of the release of July’s US Consumer Price Index (CPI) report, due later in the day.
Analysts at ING note that "Friday's soft US jobs data did not weigh heavily on the Dollar," with the market instead viewing upcoming inflation data as the decisive factor for the Fed’s next move.
In that sense, ING experts point out that "the market looks to be expecting a softer price story today," and suggest that to materially shift expectations, "we would probably need to see a 0.1% month-on-month read on core inflation – which some think is possible." In their view, "a soft number should drag market pricing of a September Fed rate hike away from a 50% probability in favour of no change."
Technical Analysis: Above $67.17, the next target is at the $71.50 area
XAG/USD confirmed its near-term bullish outlook after bouncing strongly from the $64.20 area, which has lured buyers into the peak of their last two months' trading range, at $67.17. Momentum indicators in the daily chart endorse the positive view, as the Relative Strength Index (14) trends toward the bullish side at 62.40 and the Moving Average Convergence Divergence (MACD) histogram remains positive around 1.17, hinting at steady bullish pressure.
On the topside, a confirmation above the mentioned $67.17 (June 22 high) would clear the path towards the confluence of the 200-day SMA, at $71.47, and the mid-June peak, at $71.56, which is likely to offer significant resistance.
Downside attempts, on the other hand, are likely to be tested at Tuesday's low of $64.23, and the previous resistance area between the July 6 high, at $ $63.28, and the August 6 high, at 62.92. Further down, the next target is at the July 6 and 22 highs around $60.81.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.