- Silver is bouncing from the $30.36 area, above the 50-day simple moving average, but experiencing higher resistance levels.
- The RSI indicates high buyer interest; However, the significant resistance at $32.32 continues to challenge the momentum.
- To resume the downtrend, silver must drop below the 200-day SMA and $30.00, with the next support levels at $29.51 and $28.89.
Silver price is regaining some ground and trading with a 0.91% gain, but failed to clear key resistance at the 100-day simple moving average (SMA) at $30.95. At the time of writing, XAG/USD is trading at $30.70 after bouncing from a low of $30.36.
XAG/USD Price Forecast: Technical Outlook
Silver recovered after testing the 200-day SMA near $30.05 and rose above the 50-day SMA but faces strong resistance at $30.95. The trend is leaning to the downside as the gray metal has carved out a series of lower highs and lower lows in a row. Although the Relative Strength Index (RSI) indicates that buyers are gathering momentum, the gray metal should break above the $32.32 level, the last session high recorded on December 12.
On the other hand, sellers must break above the 200-day SMA and $30.00 mark for bearish continuation. Once taken out, the next support will be the January 13 low of $29.51, followed by the January 1 low of $28.89.
XAG/USD Price Chart – Daily
Frequently asked questions about silver
Silver is a precious metal that is widely traded among investors. It has been used historically as a store of value and 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 periods of high inflation. Investors can buy physical silver, in the form of coins or bars, or trade it through instruments such as exchange-traded funds, which track its price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession could cause the price of silver to rise due to its safe-haven status, although to a lesser extent than the price of gold. As a non-yielding asset, silver tends to rise as interest rates fall. Its movements 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 low, while a weak dollar is likely to push prices higher. Other factors such as investment demand, mining supplies – silver is more plentiful than gold – and recycling rates can also influence prices.
Silver is widely used in industry, especially in sectors such as electronics or solar energy, as it has one of the highest electrical conductivity of all metals – more than copper and gold. A rise in demand can cause prices to rise, while a fall tends to bring them down. Dynamics in the economies of the United States, China and India can also contribute to price fluctuations: for the United States, and especially China, its large industrial sectors use silver in various processes; In India, consumer demand for the precious metal used in jewelery also plays a major role in determining prices.
Silver prices tend to follow gold movements. When gold prices rise, silver usually follows suit, as its status as a safe haven asset is similar. The gold/silver ratio, which shows how many ounces of silver are needed to equal the value of one ounce of gold, may help determine the relative valuation between the two metals. Some investors may consider a high ratio to be an indication that silver is undervalued, or that gold is undervalued. Conversely, a low ratio may indicate that gold is undervalued compared to silver.
