Silver Price Forecasts: XAG/USD hesitates at $74.00 as risk appetite ebbs

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Silver (XAG/USD) is looking for direction at $74.00 on Thursday, after pulling back from Wednesday’s highs at $77.65. The precious metal lost its shine as the market turned cautious with the first cracks emerging in the US-Iran ceasefire deal.

Silver wavers at $74.00 after pulling back from weekly highs at $77.65.
Concerns about the fragility of the ceasefire in Iran are weighing on precious metals.¡
XAG/USD is hovering right above the bottom of the near-term ascending channel.

Iranian authorities complained on Wednesday about violations of the ceasefire agreement, after a massive attack killed 182 people in Lebanon, and closed the Strait of Hormuz again. The US and Israel said that Lebanon was not in the deal, and US President Donald Trump warned Iran of further “action” if the terms of the deal are not complied with.

The peace process, nevertheless, remains alive. Tehran and Washington announced that they will send respective delegations to start direct negotiations in Pakistan this weekend. Investors, however, remain wary of the fragility of the ceasefire, which is keeping the US Dollar buoyed and demand for precious metals subdued on Thursday.

Technical Analysis: Nervous consolidation at the channel bottom

XAG/USD is trading just above the rising channel floor, with 4-hour indicators showing a lack of clear bias. The Relative Strength Index (RSI) is flat around the 50 line, suggesting a balanced momentum, and the Moving Average Convergence Divergence (MACD) is marginally below zero, hinting at a moderate bearish pressure.

A confirmation below the mentioned trendline support, now at $73.25, would expose Monday´s low, at $68.20, ahead of the March 23 low, at $61.00. The measured target of a potential Bearish Flag formation is the $52.00 area.

On the topside, ithe 50% Fibonacci retracement of the late-March downtrend, at $78.95, has been capping bulls this week. Further up, the 61.8% retracement at $83.15, and the channel top, at $84.50, are the next targets.

(The technical analysis of this story was written with the help of an AI tool.)

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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.