Silver Price Forecast: XAG/USD faces consolidation risk below $90 amid extreme volatility
Silver (XAG/USD) trades with a negative bias on Tuesday, as mild profit-taking emerges after the metal surged more than 8% on Monday.
  • Silver trades lower on Tuesday as profit-taking follows Monday’s sharp 8% rally.
  • Prices remain under pressure despite a softer US Dollar and easing US Treasury yields.
  • Technically, Silver is holding above its 50-day SMA, but momentum indicators point to a potential near-term consolidation phase.

Silver (XAG/USD) trades with a negative bias on Tuesday, as mild profit-taking emerges after the metal surged more than 8% on Monday. In addition, heightened volatility across the precious metals space continues to curb speculative appetite, leaving traders reluctant to add aggressive fresh bets after recent sharp price swings.

At the time of writing, XAG/USD is trading near $80.96, down around 3.47% on the day, even as a broadly weaker US Dollar and softer US Treasury yields help to cushion the downside.

From a technical standpoint, Silver posted a record high at 121.66 on 29 January following a parabolic rally that pushed prices into extremely overbought territory. The move quickly reversed into a sharp and disorderly correction of nearly 47%, as widespread profit-taking and forced liquidation swept through the market.

Even after the recent rebound, Silver remains more than 33% below its January all-time high, with technical indicators suggesting the metal may be entering a near-term consolidation phase after the recent bout of extreme volatility.

On the daily chart, Silver is hovering just above its 50-day Simple Moving Average (SMA) at $78.90, which is acting as the first layer of immediate support. The 50-day SMA remains firmly above the 100-day SMA, reinforcing the broader bullish structure despite the recent sharp correction.

A sustained break below the 50-day average would expose the $70.00 psychological level as the next key downside support, followed by the 100-day SMA near $64.28, which also aligns closely with the recent correction low. On the upside, a decisive break above the $90.00 psychological handle would be needed to revive bullish momentum.

Momentum indicators also point to a cooling near-term trend. The Relative Strength Index (RSI) has slipped back into neutral territory near 46, reflecting the loss of upside momentum.

The Average Directional Index (ADX) has eased to 44.96, signalling softer trend strength, while the Average True Range (ATR) remains elevated near 10.07, highlighting that wide daily ranges and heightened volatility are still dominating near-term price action.

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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GIÁ TRỰC TIẾP

Tên / Ký hiệu
Biểu đồ
% Thay đổi / Giá
XAUUSD
Thay đổi 1 ngày
+0%
0
XAGUSD
Thay đổi 1 ngày
+0%
0
XPTUSD
Thay đổi 1 ngày
+0%
0

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