Silver Price Forecast: XAG/USD approaches $67.00 as bulls await trading range breakout
- Silver regains positive traction on Wednesday and climbs to the top end of the weekly range.
- Sustained strength beyond the 100-SMA on the H4 should pave the way for further upside.
- The mixed technical setup warrants some caution before placing aggressive directional bets.
Silver (XAG/USD) builds on its intraday ascent and climbs back closer to the weekly high, around the $67.00 neighborhood during the early European session on Wednesday. The white metal, however, remains confined within a familiar range held over the past week or so, warranting some caution for bulls ahead of the crucial US inflation figures.
From a technical perspective, the XAG/USD bulls need to wait for acceptance above the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently pegged just ahead of the $67.00 mark, before placing fresh bets. This will also mark a fresh breakout through the trading range and pave the way for additional near-term gains.
Meanwhile, the Relative Strength Index (RSI) has recovered toward the mid-50s, hinting at stabilizing momentum. Moreover, the Moving Average Convergence Divergence (MACD) shows a modest positive reading after a shallow dip, suggesting that the downside pressure is fading but not yet reversed, while the XAG/USD remains below the 100-SMA.
On the topside, momentum beyond the $67.00 mark could extend further towards retesting the monthly swing high, around the $68.00 round figure. Some follow-through buying would ease any near-term bearish tone and reaffirm a constructive outlook. 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, and drag the XAG/USD further below the $63.00 mark, towards 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.