Silver Price Forecast: XAG/USD steadies around mid-$51.00s; seems poised to climb further
- Silver looks to build on its recent bounce from a two-week low, touched last Friday.
- The technical setup validates the positive bias and backs the case for further gains.
- A convincing break below the 200-EMA on H4 would negate the constructive outlook.
Silver (XAG/USD) holds steady around the $51.45 region during the Asian session on Tuesday, nearly unchanged for the day. Meanwhile, the broader technical setup favors bullish traders and backs the case for an extension of the recent bounce from a two-week low, around the $48.65-$48.60 zone, touched last Friday.
On the 4-hour chart, the XAG/USD stands above the rising 200-period Exponential Moving Average (EMA), currently pegged around the $49.35-$49.30 region, which supports the recovery and keeps the near-term bias pointing higher. Furthermore, the Moving Average Convergence Divergence (MACD) rises above the Signal line and sits in positive territory, while the histogram expands positively, suggesting strengthening bullish momentum.
Meanwhile, the Relative Strength Index (RSI) on the said chart stays above its midline and is mildly bullish, consistent with an upswing. This reinforces an improving tone and favors upside extension while the XAG/USD holds above the trend base. The white metal seems poised to surpass the $52.00 mark and climb further towards last week's swing high, around the $52.45 zone, before aiming towards reclaiming the $53.00 round figure.
On the flip side, pullbacks below the Asian session low, around the $51.00 mark, would stay contained and attract fresh buyers ahead of the $50.00 psychological mark. A convincing break below the latter could drag the XAG/USD to the 200-EMA, around the $49.30 region. A decisive break below the said EMA anchor would soften the outlook, whereas holding above it could pave the way for further gains in the 4-hour space.
(The technical analysis of this story was written with the help of an AI tool)
Silver 4-hour chart
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.
Recommended Articles
