Silver Price Forecast: XAG/USD eases from 14-year peak; fails ahead of $41.00 mark
Silver (XAG/USD) retreats slightly from the vicinity of the $41.00 mark, or a fresh 14-year high touched during the Asian session earlier this Wednesday. The white metal currently trades around the $40.70 region, down nearly 0.50% for the day, though any meaningful corrective slide seems elusive.
  • Silver touches a fresh 14-year high on Wednesday, though it lacks any follow-through buying.
  • A slightly overbought daily RSI prompts the XAG/USD bulls to take some profits off the table.
  • The broader technical setup backs the case for the emergence of dip-buying at lower levels.

Silver (XAG/USD) retreats slightly from the vicinity of the $41.00 mark, or a fresh 14-year high touched during the Asian session earlier this Wednesday. The white metal currently trades around the $40.70 region, down nearly 0.50% for the day, though any meaningful corrective slide seems elusive.

The daily Relative Strength Index (RSI) has been flashing slightly overbought conditions, which, in turn, prompts some profit-taking around the XAG/USD. That said, this week's move beyond the previous year-to-date high and a subsequent strength beyond $40.00 psychological mark was seen as a key trigger for bullish traders, suggesting that any further pullback could be seen as a buying opportunity.

However, weakness back below the $40.00 round figure could drag the XAG/USD to the $39.50 support zone. The latter should act as a strong near-term base, which, if broken decisively, could pave the way for deeper losses. The white metal might then accelerate the fall towards the $39.00 mark and eventually drop to the $38.50-$38.40 region en route to the next relevant support near the $38.00 round figure.

On the flip side, the XAG/USD bulls might now wait for sustained strength and acceptance above the $41.00 mark before positioning for additional gains towards the $41.50 area. Some follow-through buying would set the stage for a move beyond the $42.00 round figure, towards the next relevant hurdle near the $42.65 region.

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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