Silver Price Forecast: XAG/USD rises to near $76.00 on easing rate hike bets
- Silver gains support as the US–Iran ceasefire drove oil prices lower, easing inflation and rate hike concerns.
- Silver’s upside may be capped as the US Dollar steadies amid renewed risk aversion.
- President Trump said US forces will remain deployed around Iran until full compliance with the agreement.
Silver price (XAG/USD) extends its winning streak, trading around $76.00 per troy ounce during the Asian hours on Friday. The non-interest-bearing Silver found support as the United States (US)–Iran ceasefire triggered a sharp drop in oil prices, easing concerns over renewed inflation and further rate hikes by the central banks.
The dollar-denominated metal also benefited from a subdued US Dollar (USD) earlier this week, making it cheaper for foreign buyers. However, gains may be limited as the Greenback steadied amid renewed risk aversion driven by ongoing uncertainty surrounding the US–Iran ceasefire longevity.
Market sentiment stays cautious as Israel continues strikes on Hezbollah, despite Benjamin Netanyahu stating that Israel will soon begin direct negotiations with Lebanon. Meanwhile, US President Donald Trump said US forces will remain deployed around Iran until full compliance with the agreement is achieved.
Traders turned their attention to expected diplomatic talks in Islamabad this weekend, where US Vice President JD Vance may lead the American delegation in meetings with Iranian officials. However, uncertainty persists, with no official confirmation of delegates’ arrival on Friday.
The Federal Reserve March Meeting Minutes indicate policymakers are maintaining a wait-and-see approach, while acknowledging that inflation risks linked to higher oil prices are becoming more balanced. Traders are awaiting the US Consumer Price Index (CPI) report due later in the North American session, a key catalyst for near-term Federal Reserve (Fed) policy direction.
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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