Silver (XAG/USD) continues its recent established uptrend and rises to a new record high, around the $69.45 region, during the Asian session. Moreover, the broader technical setup appears to be strongly tilted in favor of bullish traders and suggests that the path of least resistance for the white metal remains bullish.
On the back of repeated rallies from the 100 hourly simple moving average (SMA) over the past two weeks or so, last week’s break of the $66.40-$66.50 horizontal resistance was seen as a major catalyst for the XAG/USD rally. Subsequent strength after the $67.20-$67.25 area last Friday validates the positive near-term outlook. The white metal is currently trading around the $69.25 region, up 3% on the day.
At the same time, the Relative Strength Index (RSI) on the hourly/daily charts is above the 70 mark, indicating extended conditions that could lead to a temporary pause. The 100 hourly simple moving average rises to $65.57, with the price holding well above it, keeping the near-term trend biased to the upside. Moreover, the Moving Average Convergence Divergence (MACD) stands at 0.19 in positive territory and continues to rise, indicating strengthening bullish momentum.
Buyers will maintain control while XAG/USD remains above the bullish 100-period SMA, and a pullback towards $65.57 will face dynamic support. MACD remaining positive supports the bullish tone, while the RSI in the overbought zone indicates that consolidation may precede further gains. A decisive continuation above the intraday highs could extend the advance, while failure to hold above the average would open the way for a deeper correction.
(Technical analysis of this story was written with the help of an artificial intelligence tool)
(This story was corrected on 22 December at 07:36 GMT to say in the second point that the RSI is in overbought territory, not overnight, on the hourly/daily charts warranting caution before placing new bullish bets.)
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.
