- Silver extends its recent record-setting run through the Asian session on Wednesday.
- A breakout through a short-term ascending channel backs the case for further gains.
- The RSI is flashing extremely overbought conditions, warranting some caution for bulls.
Silver (XAG/USD) prolongs its well-established uptrend through the Asian session on Wednesday and continues scaling new record highs for the fourth consecutive day. The white metal currently trades just below the $72.00 mark, up over 0.50% for the day.
The latest leg up confirms a breakout through a nearly two-week-old ascending channel and could be seen as a fresh trigger for the XAG/USD bulls. Moreover, the commodity holds well above rising moving averages, which fan out and support the bullish structure. Adding to this, the Moving Average Convergence Divergence (MACD) extends above the Signal line and remains in positive territory, with a widening positive histogram that suggests strengthening bullish momentum.
However, the Relative Strength Index (RSI) sits at 82 (overbought), warning that near-term upside could stall. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before placing fresh bullish bets around the XAG/USD. That said, the moving averages maintain a positive slope and stay stacked beneath price, reinforcing a buy-the-dip tone. The white metal trades above the trend channel resistance, keeping bulls in control while that breakout holds.
A sustained close above the near-term average cluster would keep the topside bias intact. MACD momentum stays constructive in positive territory, consistent with buyers retaining the initiative. RSI remains overbought, so a pullback could retest the former channel cap at $71.24, with additional support aligned at the lower boundary near $67.43. Holding above the reclaimed barrier would preserve the breakout, whereas a failure there could invite a deeper throwback into the channel.
(The technical analysis of this story was written with the help of an AI tool)
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.
