The price of silver (XAG/USD) is holding on after Thursday’s rebound around $74 during Friday’s Asian trading session. The white metal recovered from the previous day’s losses after returning to the February low near $64.00.
The price of silver has attracted significant bids following a acute decline in the US dollar (USD) as fears of policy divergence between the Federal Reserve (Fed) and other global central banks eased.
Technically, a lower US dollar makes the silver price an attractive risk-reward trade for investors.
The U.S. Dollar Index (DXY), which tracks the value of the dollar against six major currencies, fell more than 1% on Thursday to nearly 99.00 but rose slightly to nearly 99.35.
Comments from global central banks such as the Bank of Japan (BoJ), the Bank of England (BoE) and the European Central Bank (ECB) signaled that they were unlikely to ease monetary policy conditions amid de-anchoring of inflation expectations globally due to higher oil prices.
The US dollar strengthened on Wednesday following the Federal Reserve’s (Fed) monetary policy results, in which Chairman Jerome Powell signaled that interest rate cuts are not possible unless inflation resumes progress towards the central bank’s 2% target.
However, the scenario of a longer break or tighter monetary conditions from global central bankers is theoretically a bad scenario for non-yielding assets like silver.
Meanwhile, conflicts in the Middle East involving the US, Israel and Iran are expected to continue to limit declines in safe-haven assets such as silver. In arduous geopolitical conditions, investors tend to move to the safe-haven fleet.
Silver technical analysis
The XAG/USD rate is slightly higher at around $74. However, the near-term bias is bearish as the price continues its decline below the 20-day exponential moving average (EMA), which is currently above the spot price and acting as energetic resistance near $81.30. The sequence of low closes from the mid-90s to the mid-$70s highlights continued selling pressure, while the RSI falling below 40.00 for the first time in 11 months confirms downward momentum without reaching oversold territory. This setup keeps sellers in control unless the price can recover and stabilize above the break average.
Immediate resistance appears at $76.50, where the previous reaction high coincides with a bearish near-term structure, followed by a stronger barrier near $81.00 capped by the 20-day exponential moving average. A sustained break above $81.00 would weaken the current bearish tone and open a move towards the $84.00 area. On the other hand, initial support is at the $70 round level, followed by Thursday’s low at $65.51.
(The technical analysis for this story was written with the lend a hand of an AI tool.)
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 forceful 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 raise in demand can raise 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, immense industrial sectors employ 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 lend a hand 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.
