Silver Price Forecast: XAG/USD regains ground amid a pullback in US Treasury Yields
- Silver price jumps to near $60.40 as the US Dollar and bond yields face correction.
- Market experts see correction in the US Dollar and bond yields as temporary in nature.
- The next key trigger is the US CPI data for September.
Silver price (XAG/USD) is up 2% to near $60.40 during the European trading session on Friday, reversing its entire Thursday’s losses. The white metal strengthens as its appeal has improved due to a pullback in United States (US) Treasury Yields.
At press time, 10-year US bond yields are up 0.17% to near 2.44%. However, they corrected sharply on Thursday after failing to extend rally beyond the two-decade high at 5.36%. A pullback in US bond yields rally has also weighed on the US Dollar (USD). In early European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower to near 102.00. Technically, a lower US Dollar improves risk-reward conditions for the Silver price.
However, financial markets argue that it would be early calling a pause in the US Dollar and US Treasury Yields as the conflict between the US and Iran is still intact.
Dollar dip seen as temporary as geopolitical oil premium persists
Strategists at ING observe that the Dollar "lost a bit of ground yesterday as Treasuries took a breather," but they stress that they "don’t see signs of a broader USD correction brewing." They also highlight the geopolitical backdrop, noting that while US President Donald Trump has indicated the US "won’t attack Iran before the 3 November midterms," the oil market "is reluctant to price out the geopolitical premium that has kept prices above $100/bbl despite improved Gulf supply."
Going forward, the major trigger for the Silver price will be the US Consumer Price Index (CPI) data for September, which will be released on Wednesday.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $60.40, keeping a bearish near-term bias as spot holds beneath the 20-day Exponential Moving Average (EMA) at $62.14. The downside skew is reinforced by the Moving Average Exponential (20, close, 0) capping the price overhead, while the Relative Strength Index (14) at 41.86 remains below the midline, hinting at persistent but not extreme selling pressure.
On the topside, initial resistance is defined by the 20-day EMA at $62.14, and a sustained break above this barrier would be needed to ease the current bearish tone and open the way to higher levels. Looking down, the two-month low at $58.50 is the key supprot level.
(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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