Silver Price Forecast: XAG/USD awaits acceptance above $68.00 before the next leg up
- Silver retains positive bias on Thursday, though it lacks bullish conviction.
- Traders opt to wait for US inflation figures before placing directional bets.
- The constructive technical setup backs the case for further appreciation.
Silver (XAG/USD) struggles to capitalize on a modest intraday uptick to the $68.00 neighborhood and trades near the lower end of its daily range during the early European session on Thursday. The white metal, however, remains within striking distance of a nearly two-week high, touched on Wednesday, as traders keenly await the release of US inflation figures.
The US Producer Price Index (PPI) report will be released later today, while the US Consumer Price Index (CPI) is due on Friday. The crucial US data will be looked at for more cues about the Federal Reserve's (Fed) policy path, which, in turn, will influence the US Dollar (USD) price dynamics and drive the USD-denominated commodities, including the XAG/USD.
From a technical perspective, the white metal remains confined in a familiar range held over the past two weeks or so and, so far, has been struggling to build on its momentum above the 100-period Simple Moving Average (SMA) on the 4-hour chart. That said, supportive momentum indicators suggest that buyers retain control as long as pullbacks stay limited.
In fact, the Relative Strength Index (RSI) is hovering in the high-50s, and the Moving Average Convergence Divergence (MACD) is maintaining positive territory. However, a sustained strength beyond $68.00 is needed to back the case for a further near-term appreciating move toward the $70.00 psychological mark en route to the August swing high, above $71.00
On the downside, immediate support is seen near x$65.40-$65.30 or the lower boundary of the trading range. A convincing break below would shift the near-term bias in favor of bearish traders and expose the monthly swing low, around the $63.35-$63.30 region. The downward trajectory could drag XAG/USD further below $63.00, to the 62.20 support zone.
(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.
