Key Takeaways
- Silver price is facing challenges with a bearish bias according to daily chart analysis.
- The MACD line crossing below the signal line indicates potential downward pressure on Silver price.
- Silver price may hover near the lower boundary of the descending channel at approximately $27.70.
Silver Price Analysis
Silver price (XAG/USD) is experiencing a downtrend for the third consecutive day, currently trading around $28.50 per troy ounce during Tuesday’s Asian hours. The daily chart analysis indicates that the pair is within a descending channel, pointing towards a bearish bias. Moreover, the 14-day Relative Strength Index (RSI) below the 50 level confirms the bearish trend.
MACD Line and Signal Line
The MACD line recently crossed below the signal line, which is typically interpreted as a bearish signal. This crossover implies a shift in momentum from bullish to bearish, potentially exerting downward pressure on Silver price.
Support and Resistance Levels
Silver price is expected to find support around the lower boundary of the descending channel at the $27.70 level. A breach below this level could reinforce the bearish sentiment, pushing the price towards the throwback support level of $26.50. On the contrary, an immediate resistance lies at the upper boundary of the descending channel near the nine-day Exponential Moving Average (EMA) at $28.97. A breakout above this resistance could propel the XAG/USD pair towards the three-month high of $31.76.
Silver FAQs
Silver is a valuable metal traded extensively by investors for its intrinsic value and as a potential hedge during inflationary periods. It can be purchased physically in the form of coins or bars, or through Exchange Traded Funds that track its price on international markets. Silver prices are influenced by various factors including geopolitical instability, economic conditions, investment demand, mining supply, and the value of the US Dollar.
Price Determinants
Silver prices can fluctuate due to geopolitics, economic conditions, investment demand, and supply dynamics. Factors such as industry demand, geopolitical developments, interest rates, and currency movements can impact Silver prices. Silver prices are also influenced by its uses in industry, particularly in electronics and solar energy sectors.
Relation to Gold
Silver prices tend to move in tandem with Gold prices as both metals are considered safe-haven assets. The Gold/Silver ratio is used to determine the relative valuation between the two metals, with a high ratio potentially indicating Silver’s undervaluation. Economic conditions in major economies like the US, China, and India can also influence Silver prices due to their industrial and consumer demand for the metal.