Silver Price Forecast: XAG/USD steadies above $73, after rejection at $75
- Silver steadies halfway through the week's trading range, above $73.00.
- The pair extends losses this week, with investors pricing out further Fed easing.
- The precious metal wavers without a clear bias following rejection at $75.
Silver (XAG/USD) is trading within the lower ranges of the $73.00s during Friday’s European session following rejection at a previous support area around $75.00 earlier on the day. The pair is on track for its second consecutive negative week, as the hawkish tilt by the Federal Reserve (Fed) provided additional support to the US Dollar.
The Fed left interest rates at the 3.5%-3.75% band, but opposition from three policymakers to including the “easing bias” language in the monetary statement prompted investors to price out further rate cuts. The CME FedWatch tool, instead, shows that futures markets are leaning toward a rate hike in 2027.
Beyond that, Fed Chairman Jerome Powell, whose term expires on May 15, vowed to stay as Governor, as a sort of hawkish counterweight to the likely pressures by US President Donald Trump on the next Fed chief, Kevin Warsh, to slash interest rates.
Technical Analysis
XAG/USD consolidates halfway through the week's trading range, right above $73,00, with the broader bearish trend still in play.
Technical indicators on the 4-hour chart suggest that the precious metal is in no-man's land at the moment. The Relative Strength Index (RSI) is wavering around the key 50 line, while the Moving Average Convergence Divergence (MACD) shows a modestly positive hint at mild but not decisive bullish momentum.
Initial resistance emerges at the $74.75 area, where the latest recovery stalled, followed by the $76.75 area, which held bulls on April 24, and then a support-turned-resistance, around $78.65. On the downside, the intraday $72.80 level is capping downside attempts for now, and closing the path towards April 29 lows, near $71.00, and the early-April lows, near $68.30.
(The technical analysis of this story was written with the help of an AI tool.)
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.