Silver Price Forecast: XAG/USD trapped below 100-day SMA as US NFP approaches
- Silver consolidates below the 100-day SMA near $67 following two straight days of gains.
- Momentum indicators suggest limited bullish strength, with the RSI near 55 and the ADX around 17.
- Fading MACD red histogram bars point to easing bearish momentum, but a clear breakout is still lacking.
Silver (XAG/USD) consolidates with marginal losses on Friday following back-to-back daily gains, as traders avoid taking large positions ahead of the US Nonfarm Payrolls (NFP) report. The 100-day Simple Moving Average (SMA) near $67 caps the immediate upside, while momentum indicators point to limited bullish strength. At the time of writing, XAG/USD trades around $66.80.
The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%. The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%.
The figures are likely to play a key role in shaping the Federal Reserve’s (Fed) decision at its September 15-16 monetary policy meeting, with the CME FedWatch Tool currently showing around a 50% chance of a 25-basis-point rate hike.
A stronger-than-expected NFP could keep XAG/USD below the 100-day SMA, while a disappointing result may clear the way for a bullish breakout.
Technical analysis
XAG/USD holds above the 50-day Simple Moving Average (SMA) at $62, but remains below the 100-day SMA and the 200-day SMA, leaving the near-term bias broadly neutral with a slight topside cap.
The Relative Strength Index (RSI) on the daily chart around 55 hints at modest bullish momentum, yet the Average Directional Index (ADX) near 17 suggests a weak underlying trend.
Meanwhile, the Moving Average Convergence Divergence (MACD) remains marginally negative, although the fading red histogram bars indicate that bearish momentum is easing, reinforcing the idea of a consolidation phase rather than a clear directional move.
On the downside, the 50-day SMA near $62 and the psychological $60 mark form a strong support zone, followed by a more robust horizontal floor around $55.
On the topside, immediate resistance emerges at the 100-day SMA near $67, followed by the 200-day SMA around $72. A break above these levels could open the door towards the $80 mark.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.