Silver (XAG/USD) builds on the previous day’s positive movement and gains strong follow-on strength for the second day in a row on Tuesday. Momentum lifts the white metal to a one-week high heading into the European session, as bulls look to build on strength beyond the round $79.00 figure.
An overnight move back above the 100 hourly simple moving average (SMA), and a breakout during Tuesday through the $78.00 horizontal barrier could be seen as a major catalyst for a higher XAG/USD rally. The moving average convergence-divergence (MACD) line is located above the signal line and in positive territory, with the histogram widening, enhancing the upward momentum. The RSI (14) at 71.20 is in overbought territory, which could limit immediate gains as intraday conditions extend.
A bullish simple moving average keeps the near-term bias tilted to the upside, and pullbacks will remain contained as the price trades above it. Continued positive MACD momentum and an expanding histogram would support an uptrend extension. An RSI above 70 warns of extended momentum; A price decline towards the opening day at $76.33 should help ease overbought pressure and maintain a healthier bullish picture. Furthermore, the 100 hourly simple moving average at $74.45 could offer more dynamic support.
(Technical analysis of this story was written with the help of an artificial intelligence tool)
XAG/USD 1 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.
