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10 Dec 2024
Silver Price Forecast: XAG/USD rises to near $32.00 within an ascending channel
- Silver price continues to gain ground due to the prevailing bullish bias.
- The primary barrier appears around the upper boundary of the ascending channel at the $32.60 level.
- The nine- and the 14-day EMA at $31.27 and $31.17, respectively, would act as primary supports.
Silver price (XAG/USD) extends its gains for the second day, trading around $32.00 per troy ounce during the Asian hours on Tuesday. The daily chart analysis indicates a bullish bias, with the pair moving upwards within an ascending channel pattern. Additionally, the 14-day Relative Strength Index (RSI) remains above the 50 mark, further supporting the bullish sentiment.
The XAG/USD pair continues to trade above the nine- and 14-day Exponential Moving Averages (EMA), reinforcing a bullish outlook and signaling to strengthen short-term price momentum. This points to increasing buying interest and raises the likelihood of further price appreciation.
In terms of the upside, the Silver price finds a primary barrier around the upper boundary of the ascending channel at the $32.60 level. A break above this level could reinforce the bullish bias and support the XAG/USD pair to approach its November high at $33.13.
On the downside, the primary support appears at the nine-day EMA at $31.28, followed by the 14-day EMA at $31.17. The lower boundary of the ascending channel at $31.00 level could act as a major support.
A break below the descending channel could weaken the bullish bias and put downward pressure on the price of precious metal to test a “throwback support” at the psychological level of $30.00.
XAG/USD: Daily 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.