Silver (XAG/USD) prolongs its recent well-established upward trajectory and climbs to a fresh all-time peak, around the $70.00 psychological mark on Tuesday. The white metal trims a part of its intraday gains and trade just above mid-$69.00s during the first half of the European session, still up nearly 1% for the day.
The Relative Strength Index (RSI) is flashing extremely overbought conditions on daily as well as on the 4-hour charts, holding back the XAG/USD bulls from placing fresh bets ahead of the key US macro data. However, the broader technical setup suggests that the path of least resistance for the commodity remains to the upside. Hence, any corrective pullback might still be seen as a buying opportunity and is more likely to remain limited.
The recent move higher witnessed over the past two weeks or so has been along an upward-sloping channel. The lower boundary of the channel coincides with the 100-hour Simple Moving Average (SMA), which continues to climb and stands at the $67.00 mark, reflecting a steady bullish undertone. Price holds above the rising average, keeping buyers in control.
The Moving Average Convergence Divergence (MACD) line sits near the Signal line around the zero mark, with a marginally negative histogram that suggests momentum is subdued. An MACD turning back above zero with a widening positive histogram would bolster bullish momentum within the ascending channel. This, in turn, backs the case for a further appreciating move towards challenging the trend-channel resistance, around the $71.00 round figure mark.
On the flip side, any further pullback could find some support near the $69.00 mark ahead of the $68.70-$68.60 horizontal zone and the overnight swing low, around the $68.15-$68.10 region. Some follow-through selling below the $68.00 round figure would expose the $67.00 confluence support, and a move below would open a corrective phase.
(The technical analysis of this story was written with the help of an AI tool)
XAG/USD 1-hour 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.