Silver Price Forecasts: XAG/USD hovers at seven-month lows around $57 with US inflation on tap
- Silver remains depressed around $57.00 after dropping about 12% over the last two days.
- Rising hopes of Fed rate hikes have sent precious metals tumbling this week.
- XAG/USD has reached heavily oversold levels, which hints at a potential correction.
Silver (XAG/USD) posts moderate losses on Thursday, trading at seven-month lows around $57.00 at the time of writing, after a nearly 12% sell-off in the previous two days. Rising bets of Federal Reserve (Fed) rate hikes later in the year have hammered precious metals this week, with investors awaiting the release of the US Personal Consumption Expenditures (PCE) Price Index data to confirm those views.
An array of upbeat US macroeconomic figures, namely the labour market’s improvement, combined with above-target inflation, has prompted Fed officials to adopt a more hawkish stance in recent weeks. Markets are now pricing a 32% chance of a rate hike at next month's meeting and a 65% probability of some monetary tightening in September. This has boosted US Treasury yields, pushing the US Dollar higher.
The US calendar is packed with data on Thursday, but the main focus will be on the US PCE Price Index for May. PCE inflation is expected to have accelerated to a 4.1% year-on-year rate, its highest level in three years, as these figures predate the decline in Crude prices. These figures are unlikely to provide any significant support to Silver.
Technical Analysis: Intraday RSI shows oversold levels
XAG/USD trades at $57.14, extending a bearish near-term bias, with an oversold condition highlighting a stretched downtrend. The 4-hour Relative Strength Index (14) lies near 20 while the. Moving Average Convergence Divergence (MACD) histogram remains negative but converging towards the zero level, suggesting that bears might be exhausted.
The December 4, 2025, low, near $56.45, is holding bears so far, with the next support area at the October and November 2025 highs, in the mid-range of the $54.00s. Further down, the November 21, 2025, low, at $48.64, would be next.
On the topside, recovery attempts are likely to face resistance at a orevious support area near $61.40, with further hurdles at the June 22 high in the $67.00 area, and the June 17 high, near $71.60.
(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.
추천 기사
