The price of silver has dropped below the 100-day moving average (DMA) of $28.67, currently trading at $27.23 after reaching a peak at the same level. Technical indicators suggest further declines for silver, with key support levels at $27.00 and the 200-DMA at $26.02. In order to see a recovery, silver will need to surpass the $28.00 mark, with resistances at the August 2 high of $29.22 and the 50-DMA at $29.79.
The decline in silver prices can be attributed to a decrease in risk appetite following disappointing data from the United States, including the ISM Manufacturing PMI and Nonfarm Payrolls report. Investors are turning to safe-haven assets like US Treasuries, leading to a decrease in demand for silver. The XAG/USD pair is currently trading at $27.23 after hitting a daily high of $28.67.
XAG/USD Price Forecast: Technical Outlook
On the technical front, silver has fallen to a three-month low, with buyers struggling to reclaim the July low of $27.31. The Relative Strength Index (RSI) indicates that momentum favors sellers, nearing oversold conditions. If the XAG/USD pair drops below $27.00 and closes below that level, sellers may push the price towards the 200-DMA at $26.02. On the other hand, if buyers manage to surpass $28.00, the next resistance level is at $29.22, followed by the 50-DMA at $29.79.
XAG/USD Price Action – Daily Chart
Silver FAQs
- Silver is a precious metal that is highly traded among investors and can be used as a store of value or a hedge during high-inflation periods.
- Factors influencing silver prices include geopolitical instability, interest rates, US Dollar performance, investment demand, mining supply, and industrial usage.
- Silver is widely used in industries like electronics and solar energy due to its high electric conductivity.
- Silver prices tend to follow gold prices, and the Gold/Silver ratio can indicate the relative valuation between the two metals.
Analysis:
The recent decline in silver prices below the 100-DMA has raised concerns among investors, with technical indicators suggesting further downside potential. The key support levels at $27.00 and $26.02 will be crucial to watch for any signs of a recovery. In order to see a reversal in the trend, silver will need to surpass the $28.00 mark and break through resistances at $29.22 and $29.79. Understanding the factors influencing silver prices and keeping an eye on key technical levels will be essential for investors looking to navigate the volatile silver market.