• Silver is seen extending the overnight late pullback from the weekly high.
• The technical setup warrants some caution for aggressive bearish traders.
• A trading range breakdown is needed to back the case for further losses.

Silver (XAG/USD) slides below mid-$57.00s during the Asian session on Wednesday, retreating further from the weekly top, around the $58.60 area, touched the previous day. The white metal, however, remains confined in a one-week-old range and holds comfortably above a three-month low set last Wednesday, warranting some caution for bearish traders.

The US Dollar (USD) holds steady above a nearly three-week low, touched on Tuesday, as energy-driven inflation risks keep bets for a rate hike by the US Federal Reserve (Fed) firmly on the table. Apart from this, the geopolitical uncertainty turns out to be another factor supporting the safe-haven buck, which, in turn, is seen exerting some pressure on the XAG/USD.

The Moving Average Convergence Divergence (MACD) indicator turns modestly positive, while the Relative Strength Index (RSI) hovers near the neutral 50 region around 48. Momentum indicators together hint at stabilizing momentum but do not yet overcome the overhead trend resistance defined by the 100-period Simple Moving Average (SMA) on the 4-hour chart.

Hence, a convincing break below the trading range support, near $56.80, is needed to back the case for deeper losses to the $57.00–$56.50 region, which could act as an informal reaction zone rather than a well-defined technical floor. Meanwhile, the top end of the range near $58.00-$58.20 could act as an immediate hurdle ahead of the overnight swing high, near the $58.60 region.

The subsequent move up could allow the XAG/USD to reclaim the $59.00 mark and climb further to the 100-period SMA hurdle, near $59.51. A sustained break above this barrier would be needed to ease the current bearish bias and open the way for a more constructive recovery. The broader snapshot, however, suggests that any attempted recovery is more likely to be sold into.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

XAG/USD 4-hour chart

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.

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.