Silver price (XAG/USD) jumps to the weekly high near $62.15 during the early European trading hours on Friday. The precious metal extends the rally as a weaker-than-expected US Nonfarm Payrolls (NFP) report has reduced expectations of Federal Reserve (Fed) interest rate hikes this year.
According to the CME FedWatch tool, traders are now pricing in nearly a 52% chance of a US rate hike by September, down from 66% before the jobs data.
Traders will closely monitor the developments surrounding peace in the Middle East between the US and Iran. Renewed tensions between Wahington and Tehran could raise inflation worries, weighing the white metal.
Iran’s joint military command warned on Thursday that any US interference in the Strait of Hormuz will be met with a “decisive and swift response” as tensions continue to roil negotiations. Meanwhile, US President Donald Trump said that “I think they have accepted nearly everything we require.”
Technical Analysis:
In the daily chart, XAG/USD holds in a bearish near-term stance as price sits below the Bollinger middle band and well under the 100-day moving average (MA). The metal hovers in the lower half of its Bollinger envelope, while the Relative Strength Index (RSI) at about 42 points to subdued bullish momentum and reinforces the view that recent bounces remain corrective within a broader downside phase.
On the topside, initial resistance emerges at the Bollinger middle band near $63.50, with further barriers at the $70.00 psychologocal level. The next hurdle to watch is the upper Bollinger band around $71.80 and the 100-day MA clustered higher toward $75.00.
On the other hand, the first downside target is seen at the $60.00 round mark. The next notable cushion aligns with the lower Bollinger band near $55.25, where failure would open the door to a deeper extension of the current decline.
(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.