Silver Price Forecast: XAG/USD eases from record highs, bulls defend $53.00 support
- Silver eases from record highs after refreshing a new all-time peak near $54.86 on Thursday.
- XAG/USD slips over 1.8% on Friday as traders book partial profits amid choppy price action.
- Momentum indicators cool off, as RSI retreats and MACD signals a short-term pause in upside momentum.
Silver (XAG/USD) is taking a breather on Friday, snapping a two-day winning streak after refreshing a new all-time high near $54.86 on Thursday. At the time of writing, the white metal is trading around $53.20, down over 1.80% on the day and easing from the intraday high of $53.68.
Price action remains choppy as traders book partial profits, though safe-haven and institutional demand, along with the ongoing physical squeeze in the London market, continues to keep downside risks limited.
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From a technical perspective, the broader uptrend remains firmly intact, characterized by a series of higher highs and higher lows on a 4-hour chart. Bulls are defending the $53.00 psychological mark, which closely aligns with the 21-period Simple Moving Average (SMA) at $52.93. A decisive close below this level could trigger a deeper correction, with strong support emerging near the $51.00-$51.20 zone, reinforced by the 50-SMA at $51.18. That area is likely to attract fresh buying interest, keeping the broader bullish structure intact.
Momentum indicators are showing mild signs of fatigue following the overextended rally. The Relative Strength Index (RSI) has eased to around 60.8, showing signs of waning momentum and confirming a mild bearish divergence relative to recent price highs. This suggests that Silver could enter a consolidation phase in the near term before attempting another leg higher.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is showing signs of a bearish crossover, with the MACD line slipping below the signal line and the histogram turning negative. The crossover indicates a potential short-term loss of bullish momentum, reinforcing the likelihood of a temporary pause or minor pullback before the broader uptrend resumes.
That said, the Average Directional Index (ADX) hovers near 31, signaling that the prevailing uptrend remains strong. As long as Silver holds above the $53.00 handle, the path of least resistance stays to the upside. A break above $54.86 would reaffirm the bullish bias and pave the way toward the next resistances at $55.50 and $56.00.
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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