Silver collapses over 30% as metals rout triggers historic washout
Silver (XAG/USD) sinks sharply by more than 30% on Friday as the precious metals segment is being punished by the financial markets, with the grey metal falling more than $38 at the time of writing. XAG/USD trades at $76.91, after reaching a daily high of $118.46.
  • Silver crashes more than $38 after breaking below $100, $90 and $80 in rapid succession.
  • RSI flips sharply bearish, signaling a violent momentum reversal after extreme overbought conditions.
  • A break below $70 risks a slide toward $60, while $83.75 is key for trend recovery.

Silver (XAG/USD) sinks sharply by more than 30% on Friday as the precious metals segment is being punished by the financial markets, with the grey metal falling more than $38 at the time of writing. XAG/USD trades at $76.91, after reaching a daily high of $118.46.

XAG/USD Price Forecast: Technical outlook

As it plunges, Silver cleared key support levels like $100, $90, $80 and it seems on its way to challenge the $70.00 milestone if it wasn’t for the 50-day Simple Moving Average (SMA) standing at $73.51.

The Relative Strength Index (RSI) fell on a parabolic form from around 83 level to 42, turning bearish during the session.

If XAG/USD tumbles below $70.00, it could exacerbate a downfall towards the 100-day SMA at $60.00

Conversely, if Silver closes on a daily basis above the December 29 high of $83.75, the uptrend could remain intact and buyers could challenge higher prices in the near-term.

XAG/USD Price Chart – Daily

Silver 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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