Silver’s price surged by over 1.80% on Tuesday as tensions escalated in the Middle East following Israel’s retaliation against Hezbollah. Despite solid US data, the non-yielding metal rose to $28.17 from a daily low of $27.63.
Technical Analysis of XAG/USD Price
After hitting a two-month low of $27.31, Silver seems to have found support around $28.50. The breach of key support levels like the 50 and 100-day moving averages (DMAs) has shifted the bias from neutral to bearish. The Relative Strength Index (RSI) is in bearish territory, suggesting potential further losses.
If XAG/USD drops below $28.00, it could test the July 29 low of $27.31, with further downside targets at $27.00 and the 200-DMA at $25.92. On the upside, breaking above the 100-DMA at $28.54 could lead to a test of $29.00, followed by the 50-DMA at $29.93 and potentially $30.00.
Silver FAQs: What Investors Need to Know
Silver is a precious metal traded by investors for its value and as a hedge against inflation. Factors such as geopolitical instability, interest rates, US Dollar strength, and industrial demand can influence Silver prices. It is widely used in electronics and solar energy industries, with demand from economies like the US, China, and India impacting prices.
Investors often compare Silver to Gold, with the Gold/Silver ratio providing insights into their relative valuations. A high ratio may indicate Silver is undervalued, while a low ratio could suggest Gold is undervalued relative to Silver.
Analysis and Conclusion
The recent rally in Silver prices amid geopolitical tensions highlights its role as a safe-haven asset. Investors should monitor key support and resistance levels to navigate potential price movements. Understanding the factors influencing Silver prices can help investors make informed decisions and diversify their portfolios effectively.