Silver Price Forecast: XAG/USD declines below $94.00 amid renewed US Dollar demand
- Silver price loses momentum to around $93.75 in Monday’s early European session.
- The constructive outlook of Silver remains intact, with the price holding above the 100-day EMA.
- The initial support level is located at $82.00; immediate resistance emerges at $97.00.
Silver price (XAG/USD) edges lower to near $93.75 during the early European session on Monday, pressured by a renewed US Dollar (USD) demand. Traders will closely monitor the developments surrounding the US-Iran conflict. Hotter-than-expected US Producer Price Index (PPI) inflation provides some support to the Greenback and undermines the USD-denominated commodity price.
Nonetheless, the potential upside for the white metal might be limited, as escalating tensions in the Middle East could boost safe-haven demand. US President Donald Trump said on Monday that combat operations will continue in Iran until America’s objectives are met.
Technical Analysis:
In the daily chart, XAG/USD holds well above the 100-day exponential moving average near $72.0, preserving the broader uptrend despite recent volatility.
Daily candles remain in the upper half of the Bollinger envelope, and the middle band around $82.0 acts as dynamic trend support after the sharp pullback from the highs. RSI around 59 stays above its midline and turns higher, indicating renewed buying interest rather than exhaustion at current levels.
Immediate resistance emerges at the recent swing high near $97.00. A clear break above this area would open the way toward the psychological $100.00 region. On the downside, initial support stands at the mid-Bollinger band and prior congestion around $82.00, with a deeper floor at the rising 100-day EMA near $72.00.
(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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