Silver Price Forecast: XAG/USD eyes $67 as US yields slide
- XAG/USD surges over 5%, reclaiming the $66.50 range top.
- Bullish RSI points higher, keeping buyers in near-term control.
- Break above $67.00 exposes 100-day SMA and $71.88.
Silver price reversed its course on Wednesday and soared over 5% as US Treasury yields edged lower, as the US Treasury stepped in to cap long-end US bond yields, which had reached levels last seen in 2007. The XAG/USD traded at $66.68m after bouncing off daily lows of $62.19.
XAG/USD Price Forecast: Technical Outlook
In the short term, the trend is upward, but it has entered a phase of consolidation between $62.00 and $66.50. If buyers reclaim the top of the range, this clears the path to challenge higher prices.
Momentum remains bullish, as indicated by the Relative Strength Index (RSI), with the index aiming higher toward overbought territory. Hence, Silver’s path of least resistance is upside.
The XAG/USD's first resistance would be the high of the day (HOD) at $66.74, ahead of $67.00. Above is the 100-day Simple Moving Average (SMA) at 68.57, followed by the 200-day SMA at $71.88
XAG/USD Price Chart – Daily
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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