Silver Price Forecast: XAG/USD slips below 50-day SMA on strong US Dollar
Silver price retreats during the North American session on Monday by nearly 1%, after reaching a daily high of $78.20.
  • Silver pulls back from $78.20 as broad US Dollar strength pressures prices in thin trade.
  • Bearish engulfing keeps XAG/USD trapped within the $75.00–$80.00 consolidation band.
  • A break below $75.00 may target $70.00 and $64.10; a reclaim of $80.00 would restore bullish bias.

Silver price retreats during the North American session on Monday by nearly 1%, after reaching a daily high of $78.20. Overall US Dollar (USD) strength amid thin volume trading as US financial markets remained closed, keeping the white metal within familiar levels, yet down below the 50-day Simple Moving Average (SMA) at $79.45.

XAG/USD Price Forecast: Technical outlook

Following the formation of a ‘bearish engulfing’ candle pattern that drove Silver prices from around $83.70 towards the $75.00 area, XAG/USD continued to exchange hands within the $75.00-$80.00 range during the last two trading sessions.

Momentum as measured by the Relative Strength Index (RSI) shows that sellers are in control, as the index sits below its neutral level.

However, sellers had failed to clear decisively the $75.00 milestone. If done, it could exacerbate a retracement towards the $70.00 figure, followed by the February 6 swing low of $64.10.

Conversely, for a bullish resumption, buyers are struggling to surpass $80.00. A breach of the latter will expose the February 12 high at $84.94, followed by the February 11 peak of $86.30 ahead of the 20-day Simple Moving Average (SMA) at $89.99.

XAG/USD Price Chart — Daily

 

XAG/USD — 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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