Silver Price Forecast: XAG/USD blasts above $86 amid Powell indictment
Silver (XAG/USD) rally extends for the second straight day on Monday, with buyers pushing prices to a new record high of $86.23 a troy ounce, posting daily gains of nearly 7.50%, courtesy of the US Department of Justice, which has indicted the Federal Reserve (Fed) Chair Jerome Powell, over the reno
  • Silver hits a record $86.23 as Powell indictment revives fears over Fed credibility and policy stability.
  • Parabolic rally pushes RSI into overbought territory, though momentum remains firmly bullish for now.
  • Upside targets sit at $86.50 and $87.00, while $85.50 marks key near-term support.

Silver (XAG/USD) rally extends for the second straight day on Monday, with buyers pushing prices to a new record high of $86.23 a troy ounce, posting daily gains of nearly 7.50%, courtesy of the US Department of Justice, which has indicted the Federal Reserve (Fed) Chair Jerome Powell, over the renovations of the Fed’s buildings. At the time of writing, XAG/USD trades at $85.90.

XAG/USD Price Forecast: Technical outlook

Silver’s daily chart shows a parabolic move, further confirmed by the Relative Strength Index (RSI) turning overbought. Nevertheless, due to the strength of the uptrend, RSI’s most extreme overbought level would be the 80 threshold.

If XAG/USD clears the $86.00 level, the next immediate resistance would be $86.50. A breach of the latter would expose $87.00.

Conversely, if Silver slides below $85.50, the next support would be $85.00, followed by the latest cycle high hit on December 29 at $83.75.

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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