- Silver holds steady near a multi-month high touched earlier this Friday.
- The bullish technical setup supports prospects for further appreciation.
- Any pullback could be seen as a buying opportunity and remain limited.
Silver (XAG/USD) climbs its highest level since late October 2024 during the first half of the European session on Friday and currently trades around mid-$34.00s, up nearly 0.30% for the day. Bulls, however, opt to wait for the US Personal Consumption Expenditure (PCE) Price Index for cues about the Federal Reserve's (Fed) rate-cut path and before placing fresh bets.
From a technical perspective, the strong positive move witnessed since the beginning of 2025 has been along an upward-sloping channel. Moreover, oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone. This, in turn, favors bulls and suggests that the path of least resistance for the XAG/USD is to the upside.
That said, it will be prudent to wait for a sustained move beyond the trend-channel resistance before positioning for additional gains towards retesting a multi-year peak, around the $34.85 zone touched in October. Some follow-through buying will be seen as a fresh trigger for bulls and set the stage for an extension of a well-established multi-month-old uptrend.
On the flip side, any corrective pullback might now be seen as a buying opportunity and is more likely to remain cushioned near the $34.00 round figure. A convincing break below, however, might prompt some technical selling and drag the XAG/USD to the next relevant support near the $33.50 region en route to the $33.00 mark and last week's swing low, around the $32.65 area.
Silver daily 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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