The price of silver (XAG/USD) is rising on Friday, rebounding from daily lows around $74 and gaining over 2.50%, but the week could still end in the red. A smaller-than-expected inflation report in the US resulted in an augment in the price of the white metal, which will cost $77.20 per troy ounce before the weekend.
XAG/USD Price Forecast: Technical Outlook
Silver is down 0.85% for the week, after starting the week around $80.00. Nevertheless, U.S. stocks fell on Thursday, pushing down XAG, which has recently moved in lockstep with stocks.
The Relative Strength Index (RSI) suggests that the precious metal may be trading sideways, with the high capped by the 50-day SMA at $79.08 and the low at $64.41 where the 100-day SMA lies.
If XAG/USD falls below $75.00, the first support will be the February 13 low of $74.01. After clearing, the next stop will be $70.00, ahead of the 100-day SMA.
On the other hand, if XAG/USD regains $80.00, the first resistance will be the December 29 high of $83.75, before the February 11 high of $86.30.
XAG/USD price chart – daily
Silver FAQs
Silver is a precious metal that investors like to trade. Historically, it has been used as a store of value and a medium of exchange. Although less popular than gold, investors may turn to silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during periods of high inflation. Investors can buy physical silver in coins or bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can fluctuate due to many factors. Geopolitical instability or fear of a deep recession may push silver prices higher due to its safe-haven status, although to a lesser extent than gold. As a non-yielding asset, silver tends to rise at lower interest rates. Its movements also depend on the behavior of the US dollar (USD) when the asset is priced in dollars (XAG/USD). A mighty dollar tends to keep the price of silver at bay, while a weaker dollar will likely push prices higher. Other factors such as investment demand, mining supply – there is much more silver than gold – and recycling rates can also influence prices.
Silver is widely used in industry, especially in sectors such as electronics and solar energy, because it has one of the highest electrical conductivities of all metals – greater than copper and gold. An augment in demand can augment prices, while a decrease usually lowers them. The dynamics of the economies of the United States, China and India can also contribute to price fluctuations: in the case of the United States and especially China, gigantic industrial sectors utilize silver in various processes; in India, consumer demand for precious metals for jewelry production also plays a key role in pricing.
Silver prices usually follow the movements of gold. When gold prices rise, silver tends to follow suit because their status as safe-haven assets is similar. The gold-to-silver ratio, which shows the number of ounces of silver needed to equal the value of one ounce of gold, can aid determine the relative valuation of the two metals. Some investors may view a high ratio as an indicator that silver is undervalued or gold is overvalued. On the contrary, a low ratio may suggest that gold is undervalued relative to silver.
