Silver Price Forecast: XAG/USD rises to near $32.00; finds support at nine-day EMA
- Silver price could further rise as the daily chart analysis suggests a persistent bullish bias.
- The pair may retest its three-month high of $32.65, reached on February 7.
- The nine-day EMA of $31.71 acts as immediate support.
Silver price (XAG/USD) rebounds from recent declines, hovering near $32.00 per troy ounce during Monday's Asian session. A daily chart analysis indicates a sustained bullish trend, with the metal price advancing within an ascending channel.
The XAG/USD pair remains above the nine-day and 14-day Exponential Moving Averages (EMAs), signaling strong short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) stays above the 50 mark, further supporting the prevailing bullish sentiment.
Silver price could encounter initial resistance at its three-month high of $32.65, last tested on February 7, aligning with the upper boundary of the ascending channel. A decisive breakout above this level could strengthen the bullish trend, potentially driving the XAG/USD pair toward the psychological mark of $33.00.
On the downside, support is found at the nine-day EMA at $31.71, followed by the 14-day EMA at $31.44, and the ascending channel’s lower boundary at $31.10. A breach below this key support zone could weaken the bullish outlook, exposing the XAG/USD pair to further downside toward its five-month low of $28.74, recorded on December 19.
XAG/USD: 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.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
