Silver slumps to $79 despite softer US Dollar, falling US yields
- Silver drops nearly 2% to $79.13, down 1.81% on the week.
- Higher Oil prices and Middle East tensions fuel inflation fears, pressuring metals.
- DXY slips to 99.68 while US 10-year yields ease to 4.19%.
Silver prices retreated nearly 2% on Tuesday, even as the Greenback remained softer and US Treasury yields fell. Higher Crude Oil prices pressure the white metal. which is down 1.81% in the week, while risk appetite improves. The XAG/USD trades at $79.13 a troy ounce after hitting a daily high of $82.53.
Rising Oil prices, persistent geopolitical risks weigh on Silver
The Middle East conflict shows no signs of de-escalation as Israel reported that it killed Iran’s security chief, as hostilities entered the third week. US equities are trading higher in the session as market participants digested the latest ADP Employment Change 4-week average and Pending Home Sales.
ADP figures softened from 14.75K to 9K, indicating weakness in the labour market. Meanwhile, Pending Home Sales for February rose by 1.8% MoM, up from a 1% contraction in January, exceeding estimates of -0.5%.
The US Dollar Index (DXY), which measures the buck’s performance against six currencies, is down 0.15% at 99.68. The US 10-year T-note yield is falling by 2 basis points to 4.198%.
In the meantime, fears that inflation would rise due to the Iran war, alongside shipping disruptions in the Strait of Hormuz, prevented central banks from continuing to ease monetary policy.
During the Asian session, the Reserve Bank of Australia (RBA) hiked rates by 25 bps, blaming higher prices and uncertainty about the resolution of the Middle East war.
On Wednesday, the Bank of Canada (BoC) and the Federal Reserve (Fed) will be the next central banks to unveil their monetary policy stance. Both the BoC and the Fed are expected to hold rates unchanged, with the latter poised to reveal the latest economic projections.
On Thursday, it will be the turn of the European Central Bank (ECB) and the Bank of England (BoE).
XAG/USD Price Forecast: Technical outlook
In the daily chart, XAG/USD trades at $79.35. The near-term bias is mildly bearish as price slides below the clustered 50–200-day simple moving averages, which now cap the upside around the mid-$80s and confirm a loss of trend support. RSI near 44 sits below the 50 line, aligning with building downside momentum after repeated failures under the descending resistance trend line from $96.62, where recent rebounds have stalled and reversed.
Initial resistance is seen near $82.00–$83.00, where the falling resistance line from $96.62 converges with the lower end of the moving-average band, followed by a stronger barrier toward $86.50–$87.50. On the downside, immediate support emerges around $78.00, with a deeper bearish extension exposing the $73.50 area, which guarded previous pullbacks and would be critical to preserve the broader uptrend from the sequence of rising support lines starting in the mid-$20s and mid-$40s.
(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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