Silver (XAG/USD) attracted some sellers during the Asian session on Thursday and is currently trading around the $65.75-$65.70 area, down over 1% on the day. However, the white metal is still a striking distance from its all-time peak reached the previous day, and the broader technical setup still appears to be strongly tilted in favor of bullish traders.
An overnight break through the horizontal barrier near the $64.00 mark was seen as a major catalyst for the XAG/USD rally and validates the positive near-term outlook. The aforementioned handle now coincides with the pivotal support of the 100-hour simple moving average (SMA), which in turn should act as a strong base for the commodity and as a major pivot point for short-term traders.
The Relative Strength Index (RSI) is at 59.95, which is neutral to bullish on the one-hour chart, although it indicates overbought conditions on the daily chart. The Moving Average Convergence-Divergence (MACD) histogram has dropped below zero, indicating that the MACD line has crossed below the signal line, and momentum has subsided. However, the broader situation remains somewhat constructive
Furthermore, the upward slope of the 100 hourly simple moving average suggests that any corrective decline is likely to attract dip buying. Staying above the bullish SMA would maintain the bullish tone of the XAG/USD pair, while a decisive break below this support would open the door to a deeper pullback. MACD returning to positive territory, and RSI holding above 50 would reinforce the bullish outlook.
(Technical analysis of this story was written with the help of an artificial intelligence tool)
Silver hour chart
Frequently asked questions about silver
Silver is a precious metal that is widely traded among investors. It has been used historically as a store of value and 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 periods of high inflation. Investors can buy physical silver, in the form of coins or bullion, or trade it through instruments such as exchange-traded funds, which track its price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession could cause the price of silver to rise due to its safe-haven status, although to a lesser extent than the price of gold. As a non-yielding asset, silver tends to rise as interest rates fall. Its movements 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, while a weak dollar is likely to push prices higher. Other factors such as investment demand, mining supplies – silver is more plentiful than gold – and recycling rates can also influence prices.
Silver is widely used in industry, especially in sectors such as electronics or solar energy, as it has one of the highest electrical conductivity of all metals – more than copper and gold. A rise in demand can cause prices to rise, while a fall tends to bring them down. Dynamics in the economies of the United States, China and India can also contribute to price fluctuations: for the United States, and especially China, its large industrial sectors use silver in various processes; In India, consumer demand for the precious metal used in jewelery also plays a major role in determining prices.
Silver prices tend to follow gold movements. When gold prices rise, silver usually follows suit, as its status as a safe haven asset is similar. The gold/silver ratio, which shows how many ounces of silver are needed to equal the value of one ounce of gold, may help determine the relative valuation between the two metals. Some investors may consider a high ratio to be an indication that silver is undervalued, or that gold is undervalued. Conversely, a low ratio may indicate that gold is undervalued compared to silver.
