Silver Price Forecast: XAG/USD edges higher toward $32.00 barrier near 14-day EMA
- Silver price may face initial resistance at the 14-day EMA near $32.12.
- Daily chart analysis suggests a growing bearish outlook, as the metal remains below the ascending channel.
- The initial support appears at the psychological level of $31.00.
Silver price (XAG/USD) halts its three-day losing streak, trading near $31.80 per troy ounce during the European session on Wednesday. Technical analysis on the daily chart indicates a developing bearish outlook, with the metal trading below the lower boundary of its ascending channel pattern.
Silver price also trades below the nine-day and 14-day Exponential Moving Averages (EMAs), signaling weakened short-term momentum. However, the 14-day Relative Strength Index (RSI) has bounced back above the 50 mark, indicating that bullish sentiment remains intact. Upcoming price action will provide clearer insight into the price’s directional trend.
To the downside, the XAG/USD pair may find initial support at the psychological level of $31.00. A decisive break below this mark could strengthen the bearish outlook, potentially pushing Silver's price toward the five-month low of $28.74, last seen on December 19.
Silver price could encounter initial resistance at the 14-day EMA around $32.12, followed by the nine-day EMA near $32.19. A move back into the ascending channel pattern would restore the bullish outlook, potentially pushing the pair toward the four-month high of $33.40. A breakout above this level would strengthen the bullish bias, opening the door for the metal price to test the ascending channel’s upper boundary near $35.00.
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.
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