Silver Price Forecast: XAG/USD holds gains but struggles for fresh momentum
- Silver retains a constructive technical outlook despite trading in a narrow range.
- The 4-hour MACD suggests the recent bullish momentum is losing strength.
- Immediate support sits near $64, while the $68-$69 region forms a key resistance zone.
Silver (XAG/USD) trades on the front foot on Friday but lacks strong follow-through and remains within the narrow range seen this week. At the time of writing, XAG/USD trades around $65 after bouncing from an intraday low of $63.51.
The US Dollar (USD) weakens across the board as the latest batch of US economic data reduces expectations of a near-term Federal Reserve (Fed) interest-rate hike, creating a supportive backdrop for the non-yielding metal.
Meanwhile, Silver also maintains a positive technical bias following its recent recovery from near $55. However, weakening short-term momentum leaves the metal vulnerable to further consolidation.
Technical Analysis: 4-hour chart
XAG/USD maintains a bullish near-term bias as price holds above the 50-period Simple Moving Average (SMA) near $63.60 and the longer-term 100- and 200-period SMAs clustered between roughly $60.80 and $59.90. The pair is consolidating just under the recent cycle highs, with the Relative Strength Index (14) around 55 suggesting moderately positive but not overextended momentum, while the Moving Average Convergence Divergence (MACD) remains below zero with a negative line, hinting that upside pressure is firm but losing some steam after the latest rally.
On the downside, initial support is seen at the 23.6% Fibonacci retracement at $64.38, followed by the 50-period SMA at $63.60 and a dense structural zone formed by the 38.2% retracement at $62.89 and the 50.0% level at $61.68, which converge with the 61.8% retracement at $60.47 and the 100-period SMA at $60.84.
Deeper setbacks would expose the 78.6% retracement at $58.76 and the 200-period SMA near $59.92 as a broader bullish base, while on the topside, the recent anchor around $66.80 acts as the next significant resistance level that bulls would need to clear to extend the uptrend.
Technical Analysis: Daily chart
XAG/USD holds above the 50-day SMA at $61.36 and has also reclaimed the 23.6% Fibonacci retracement at $63.10 as support, which together suggests a constructive near-term bias despite the broader downtrend defined by the 100-day SMA at $68.77 and the 200-day SMA at $71.64 overhead.
A firm Relative Strength Index (RSI) near 59 and a positive Moving Average Convergence Divergence (MACD) line with a still-elevated histogram hint that bullish momentum is intact while price remains under these longer-term averages.
On the topside, initial resistance is located at the 38.2% Fibonacci retracement at $68.12, closely followed by the 100-day SMA at $68.77, while the 200-day SMA at $71.64 and the 50% retracement at $72.18 form a higher cap ahead of the 61.8% and 78.6% retracements at $76.24 and $82.02, respectively.
On the downside, immediate support appears at the 23.6% retracement at $63.10, with the 50-day SMA at $61.36 protecting the recent advance; a deeper pullback would expose the structural floor around the $54.99 cycle low.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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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