Silver Price Forecast: XAG/USD edges lower below $70.00 as bearish bias holds under 100-day SMA
- Silver Price declines to near $69.85 in Tuesday’s early European session.
- The bearish outlook remains intact under the 100-day SMA; RSI momentum holds below the midline.
- The first upside barrier emerges at $72.25; the initial support level to watch is $63.80.
Silver Price (XAG/USD) trades in negative territory around $69.85 during the early European trading hours on Tuesday. The white metal retreats from a weekly high as traders book some profits ahead of the US Federal Reserve (Fed) interest rate decision.
The US central bank is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% at its upcoming policy meeting on Wednesday.
Traders will closely monitor the developments surrounding the US-Iran peace deal. The progress of a preliminary framework agreement between both countries has significantly eased geopolitical tensions and might help limit Silver’s losses in the near term.
Bets on Fed rate hikes receded after the framework deal, supporting the precious metals, non-yielding assets. Markets cut the chance of a US rate hike in December to 58% from nearly 70% last week, according to the CME FedWatch tool.
Technical Analysis:
In the daily chart, XAG/USD remains under clear downside pressure as price holds below the Bollinger Bands’ 20-day simple moving average and the 100-day simple moving average, keeping the broader trend tilted lower. The Relative Strength Index (14) hovers just below the midline, hinting at weak but not extreme bearish momentum while silver consolidates in the lower half of its recent volatility envelope.
On the topside, initial resistance is located at the Bollinger Bands’ middle line around $72.25. The next hurdle to watch is the June 5 high of $74.14, en route to the 100-day SMA near $78.55 and the upper Bollinger band around $80.72. On the downside, the next notable support aligns with the lower Bollinger band at roughly $63.80, where volatility-based demand could attempt to slow the current bearish phase.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
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.
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.
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.
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.
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