Silver Price Forecast: XAG/USD extends recovery to near $31.00 as safe-haven demand improves

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Silver price extends its recovery to near $31.00 as demand for safe-haven asset improves. Russia threatens to attack Ukraine with nuclear-capable ballistic missiles. The US Dollar recovers with investors focusing on a slew of US economic data.

Silver price (XAG/USD) recovers further to near $31.00 in North American session on Friday. The white metal bounced back on Thursday after posting a fresh 11-week low near $29.60. The asset strengthens as investors fear that Russia could launch a nuclear attack on Ukraine.

Russia threatens a possible nuclear-capable ballistic missile strike on Ukraine, followed by firing a series of Intermediate Range Ballistic Missiles (IRBM) on 17 targets, including defense and energy facilities. The prevailing war between Russia and Ukraine keeps the demand for safe-haven assets intact. This was the second-largest Russian attack on Ukraine, according to Ukraine’s energy ministry. Historically, the safe-haven appeal of precious metals such as Silver increases at times of global market uncertainty or heightened geopolitical risks.

In the Middle East, tensions between Israel and Iran have eased, with a ceasefire coming into effect early this week .

Meanwhile, the US Dollar (USD) rebounds strongly as investors shift focus to the United States (US) labor market and business activity data, which will be released next week. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, bounces back after posting a fresh two-week low near 105.60.

Silver technical analysis

Silver price rebounds strongly after sliding to near the upward-sloping trendline around $29.50, which is plotted from the February 29 low of $22.30 on a daily timeframe. Still, the outlook of the Silver price is bearish as a bear cross, represented by 20 and 50-day Exponential Moving Average (EMA) around $31.30, points to an escalation in the downside trend.

The white metal weakened after the breakdown of the horizontal support plotted from the May 21 high of $32.50.

The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a sideways trend.

Silver daily 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 … Read More