- Silver gains strong follow-through positive traction and hits a fresh all-time peak on Monday.
- The overbought RSI on hourly/daily charts warrants caution before placing fresh bullish bets.
- The broader technical setup backs the case for an extension of a well-established uptrend.
Silver (XAG/USD) prolongs its recent well-established uptrend and climbs to a fresh record high, around the $69.45 area, during the Asian session. Moreover, the broader technical setup seems tilted firmly in favor of bullish traders and suggests that the path of least resistance for the white metal remains to the upside.
Against the backdrop of repeated rebounds from the 100-hour Simple Moving Average (SMA) over the past two weeks or so, last week's breakout through the $66.40-$66.50 horizontal resistance was seen as a key trigger for the XAG/USD bulls. A subsequent strength beyond the $67.20-$67.25 region last Friday validates the near-term positive outlook. The white metal currently trades around the $69.25 area, up 3% for the day.
Meanwhile, the Relative Strength Index (RSI) on hourly/daily charts sits above the 70 mark, signaling stretched conditions that could prompt a pause. The 100-hour SMA climbs to $65.57, with price holding well above it, keeping the near-term trend biased upward. Moreover, the Moving Average Convergence Divergence (MACD) stands at 0.19 in positive territory and continues to rise, suggesting strengthening bullish momentum.
Buyers would retain control while XAG/USD remains above the rising 100-period SMA, and a pullback toward $65.57 would meet dynamic support. The MACD staying positive supports the bullish tone, while an overbought RSI suggests consolidation could precede further gains. A decisive continuation above intraday highs could extend the advance, whereas failure to hold above the average would open room for a deeper retracement.
(The technical analysis of this story was written with the help of an AI tool)
(This story was corrected on December 22 at 07:36 GMT to say in the second bullet point that the overbought RSI, not overnight, on hourly/daily charts warrants caution before placing fresh bullish bets.)
XAG/USD 1-hour 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.
