Silver’s price dropped to $31.13, reflecting an increase in downside risks. The precious metal couldn’t maintain a position above $33.00, which led to some consolidation and selling pressure. Currently, it sits at the 100-day Simple Moving Average (SMA) of $31.20, with the next significant support expected at the 50-day SMA of $30.89. A decline below this level could bring the 200-day SMA at $30.47 and the January low of $29.70 into play.
Silver closed out the week with nearly a 4% decrease as traders looked to secure profits amidst concerns of a potential US recession sparked by new economic data. At the moment, XAG/USD is hovering at $31.13, down by 0.32%.
XAG/USD Price Forecast: Technical Overview
After failing to establish a robust foothold above $33.00, silver showed signs of consolidation, potentially stalling its path to $34.00. Instead, XAG/USD comfortably surpassed the 100-day SMA at $31.20, creating an opportunity to test the 50-day SMA at $30.89.
Despite a push from sellers lowering the prices, buyers managed to reclaim the $31.00 mark. Yet, the Relative Strength Index (RSI) hints that selling momentum is building up.
Consequently, if the XAG/USD weakens further, the 50-day SMA at $30.89 will act as the primary support. If this level is breached, it could lead to further declines, exposing the 200-day SMA at $30.47. A successful challenge of these levels by the sellers would mark a downward trend shift, with January’s low of $29.70 emerging as a new target for bearish traders.
XAG/USD Daily Price Chart
Silver FAQs
Silver, while less popular than Gold, remains a valuable asset for investors due to its historical role as both a store of value and a medium of exchange. Diversifying an investment portfolio often involves silver, which can be acquired physically in coins or bars or through financial instruments like Exchange Traded Funds (ETFs).
Several factors can influence silver prices. Geopolitical uncertainties or recession fears often cause its value to rise, reflecting its safe-haven status which, while strong, typically doesn’t eclipse Gold. Silver is a yieldless asset, so its price tends to rise when interest rates are low. Additionally, the strength of the US Dollar (USD) heavily impacts silver pricing since it’s priced in USD. A stronger dollar typically keeps silver prices in check, while a weaker dollar could propel them higher. Other influential elements include investment demand, mining supply, and recycling rates.
Industrially, silver is crucial, particularly in electronics and solar energy, thanks to its high electrical conductivity, surpassing both Copper and Gold. The industrial demand shifts in significant economies like the US, China, and India can also swing prices, with India’s demand for silver jewelry notably affecting market dynamics.
Typically, silver’s price movements often align with those of Gold, given their shared safe-haven status. The Gold/Silver ratio, indicating the number of silver ounces needed to match the value of one gold ounce, is often used to gauge relative valuations. A high ratio might suggest silver is undervalued, while a low ratio could indicate gold’s undervaluation relative to silver.
