Silver Price Forecast: XAG/USD bears have the upper hand below $64.75-$64.85 confluence
- Silver struggles to gain any meaningful traction and oscillates in a range at the start of a new week.
- The technical setup favors bears and suggests that the path of least resistance is to the downside.
- A sustained move and acceptance above the 200-SMA on H4 is needed to negate the negative bias.
Silver (XAG/USD) kicks off the new week on a subdued note and oscillates in a narrow band above the $64.00 mark through the Asian session as traders seem hesitant to place directional bets ahead of key central bank event risks.
The US Federal Reserve (Fed) is scheduled to announce its rate decision on Wednesday, which will be followed by the Bank of England (BoJ) meeting on Thursday and the Bank of Japan (BoJ) policy update on Friday. Investors will look for more cues about central banks' future policy path, which, in turn, will play a key role in driving demand for the non-yielding XAG/USD.
From a technical perspective, the white metal holds below the 200-period Simple Moving Average (SMA) on the 4-hour chart at $64.91 and the 38.2% Fibonacci retracement at $64.78, which together cap the near-term tone and keep the bias bearish. Moreover, the Moving Average Convergence Divergence (MACD) indicator remains below zero with a slightly negative latest reading.
Adding to this, the Relative Strength Index (RSI) around 42 suggests waning momentum after the recent pullback, reinforcing the idea of a market that is struggling to regain topside traction. The setup, in turn, suggests that any meaningful bullish attempts would face immediate resistance at the 38.2% retracement at $64.78, closely followed by the 200-period SMA at $64.91.
A further move up could lift the XAG/USD pair to the next relevant hurdle near the 23.6% Fibo. retracement at $67.15 and the cycle high region around $70.99. On the downside, initial support appears at the 50% retracement near $62.86, ahead of the 61.8% Fibo. at $60.94, with deeper structural floors at $58.21 and $54.74.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 4-hour chart
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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