Silver Price Forecast: XAG/USD plummets below $76 as oil price posts fresh weekly high

• Silver price plunges below $76 as oil prices extend rally amid the closure of the Strait of Hormuz.

• Higher oil prices have boosted global inflation expectations.

• The Fed is expected to hold interest rates steady at their current levels by year-end.

Silver price (XAG/USD) is down almost 2.3% to near $76.00 during the European trading session on Thursday. The white metal faces selling pressure as oil prices extends its winning streak for the third trading day on Thursday.

WTI Oil price jumps to near $95.80 during the day, the highest level in a week, as the Strait of Hormuz, a vital passage to almost 20% of global energy supply, remains closed, despite a ceasefire extension between the United States (US) and Iran.

Tehran remains firm on its vow that the Hormuz will remain closed until the US lifts the blockade on Iranian sea ports, a move that has frozen Iranian business activity.

Higher oil prices result in a sharp increase in inflation expectations globally, a scenario that discourages central banks from reducing interest rates, which eventually diminishes the demand for non-yielding assets, such as Silver.

Meanwhile, a higher US Dollar (USD) due to hopes that the Federal Reserve (Fed) will not cut interest rates this year has also weighed on the Silver price. According to the CME FedWatch tool, the possibility of the Fed holding interest rates steady in the current range of 3.50%3.75% in the December meeting is 76.8%.

During the day, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh weekly high at around 98.70.

Silver technical analysis

XAG/USD trades lower at around $76 as of writing. The overall trend of the white metal appears to be uncertain as it is on the verge of an Ascending Triangle breakdown. The 20-day Exponential Moving Average (EMA) at $76.84 caps the upside as immediate resistance.

The Relative Strength Index (RSI) at 47.85 sits just below the neutral 50 line, hinting at fading bullish momentum rather than outright oversold conditions.

On the topside, the horizontal barrier of the Ascending Triangle formation at around $83.00 is the key resistance for the price. A daily close above $83 would extend the rally towards the psychological level of $90.00. Until those levels are recovered, the metal remains vulnerable to further downside towards the April 13 low at around $72.60, followed by the April 7 low of $68.28.

(The technical analysis of this story was written with the help of an AI tool.)