Silver Price Forecast: XAG/USD hovers around $33.00 after breaking below nine-day EMA
- Silver price could find the immediate support at the 50-day EMA of $32.71.
- A bullish bias could revive as the 14-day RSI remains slightly above the 50 level.
- The initial resistance appears at the nine-day EMA of $33.10.
Silver price (XAG/USD) offers its recent gains registered in the previous session, trading around $33.00 per troy ounce during the Asian hours on Friday. A neutral bias is prevailing as the technical analysis of the daily chart shows the price of the precious metal consolidating within a rectangular pattern.
Additionally, the Silver price is hovering around the nine-day Exponential Moving Average (EMA), further highlighting that the short-term momentum is impartial. However, the 14-day Relative Strength Index (RSI) remains positioned slightly above the 50 level, indicating a potential for a bullish bias to emerge.
Silver price may target the immediate support at the 50-day EMA of $32.71. A break below this level could weaken the medium-term price momentum and lead the price of the precious metal to approach the lower boundary of the rectangle at $31.90, followed by the six-week low at $31.65, which was recorded on May 15.
On the upside, the XAG/USD pair tests the immediate barrier at the nine-day EMA of $33.10. A break above this level could improve the short-term price momentum and support the price of the grey metal to explore the region around the rectangle’s upper boundary at $33.60, aligned with the $33.69, the seven-week high reached on April 24. A break above this crucial resistance zone could cause the emergence of the bullish bias and lead the Silver price to approach the seven-month high of $34.59, last seen on March 28.
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.