Bearish bias holds as XAG/USD struggles below $75

From a technical perspective, XAG/USD remains bearish in the near term, with repeated rejection at the 100-day Simple Moving Average (SMA) around $75.63 capping upside attempts. However, the pair continues to hold above the 200-day SMA at $59.06, indicating that the broader uptrend remains intact despite the recent weakness.

The Relative Strength Index (RSI) at 43.64 remains below the 50 mark after approaching oversold territory, indicating weak momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator (12, 26, 9) has moved back above its signal line. Still, it remains below the zero line, suggesting only modest upside attempts within a still-negative momentum backdrop.

Initial resistance is seen at the 100-day SMA around $75.60, with a daily close above this level opening the door toward the 50-day SMA near $82.90. A stronger recovery could then face an additional hurdle at the February swing high around $96.62.

On the downside, immediate support lies in the $70-$68 zone, followed by the March low near $61.01, which closely aligns with the 200-day SMA.

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 Golds. 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 prices tend to follow Golds 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.