Silver Price Forecast: XAG/USD slides further to near $75 as high oil prices extend gains
- Silver price tumbles to near $75 as global inflation expectations rise further due to rallying oil prices.
- The Fed is more likely to deliver at least one interest rate hike this year.
- US President Trump threatens serious consequences against Iran if it doesn’t agree to a deal.
Silver price (XAG/USD) is down over 1% to near $75.00 during the European trading session on Monday. The white metal extends its two-day massive decline as rising oil prices due to fears of the United States (US)-Iran war resumption have promoted global inflation expectations further.
During the day, the WTI Oil price jumped to near $103.86, the highest level seen so far this month.
Oil prices have increased further amid fears of a prolonged closure of the Strait of Hormuz, following threats from US President Trump that Iran would face serious consequences, through a post on Truth Social, if it doesn’t agree to a deal.
“For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” Trump wrote over the weekend.
Escalating global inflation projections have boosted bond yields, a scenario that bodes poorly for non-yielding assets, such as Silver. As of writing, 10-year US Treasury Yields are up 0.43% to near 4.62%. 10-year UK gilt yields jump 3% to near 5.19%, the highest level seen since the sub-prime crisis; however, rising UK political uncertainty has also strengthened them.
Meanwhile, traders have also priced out expectations of interest rate cuts by the Federal Reserve (Fed) this year. According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike this year is 54.5%, a sharp turnaround from two interest rate cuts anticipated during the peace time.
Silver technical analysis
XAG/USD trades lower at around $75.08, holding a bearish near-term bias as it remains below the 20-day Exponential Moving Average (EMA) at $78.59.
The 14-day Relative Strength Index (RSI) hovers at a subdued 44.77, suggesting fading bullish momentum and reinforcing the notion that rallies are likely to encounter selling interest while price stays capped under the $77–79 area.
On the downside, the white metal could be exposed to the $70 zone, followed by the March 26 low of $66.71, if it fails to hold the upward-sloping border of the Ascending Triangle pattern around $75.00. Looking up, the 20-day EMA at $78.59 will be the key resistance level, and a break above the same would be needed to ease downside pressure. A sustained move above the 20-day EMA would allow the Silver price to rise towards $80.00.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
Why do people invest in Silver?
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.
Which factors influence Silver prices?
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.
How does industrial demand affect Silver 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.
How do Silver prices react to Gold’s moves?
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.
