Silver Price Analysis: XAG/USD trades below $50.00, seems vulnerable to slide further
Silver (XAG/USD) struggles to capitalize on Friday's modest recovery from the $48.65-$48.60 region, or a nearly two-week low, and attracts fresh sellers on the first day of a new week.
  • Silver attracts sellers for the third straight day, though it manages to hold above Friday’s swing low.
  • The broader technical setup favors bearish trades and backs the case for further near-term losses.
  • Acceptance below the 200-period EMA on the 4-hour chart is needed to reaffirm the negative bias.

Silver (XAG/USD) struggles to capitalize on Friday's modest recovery from the $48.65-$48.60 region, or a nearly two-week low, and attracts fresh sellers on the first day of a new week. The white metal currently trades around the $49.80 area, down nearly 0.30% for the day, and seems vulnerable to slide further.

From a technical perspective, the XAG/USD has been showing some resilience below the rising 200-period Exponential Moving Average (EMA) on the 4-hour chart. That said, the lack of any meaningful buying interest and negative oscillators suggests that the path of least resistance for the commodity is to the downside. However, it will still be prudent to wait for acceptance below the 200-period EMA on the 4-hour chart, currently pegged near the $49.20-$49.15 region, before placing fresh bearish bets.

The XAG/USD might then accelerate the downfall towards Friday's swing low, around the $48.65-$48.60 region, and weaken further towards the $48.00 round figure. A convincing break below the latter could prompt aggressive technical selling and expose the next relevant support near the $47.15-$47.10 zone.

On the flip side, any intraday recovery back above the $50.00 psychological mark is likely to confront an immediate hurdle near the Asian session swing high, around the $50.40 region. A sustained strength beyond could trigger a short-covering rally and allow the XAG/USD to reclaim the $51.00 round figure. The momentum could extend further towards the $51.35-$51.40 strong barrier, which, if cleared decisively, might shift the near-term bias in favor of bullish traders and pave the way for additional gains.

Silver 4-hour chart

Chart Analysis XAG/USD


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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XBRUSD
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