Silver (XAG) Forecast: Can XAG/USD Break Through the 200-Day Moving Average?

Silver Gains Momentum with Key Resistance in Sight

Silver prices advanced for the second consecutive session on Friday, setting the stage to challenge critical technical resistance levels. The metal’s performance reflects increased investor interest, driven by favorable economic conditions, lower U.S. yields, and ongoing safe-haven demand. Traders are closely watching silver as it approaches the 200-day moving average, which could act as a catalyst for further upward movement.

At 11:18 GMT, XAG/USD is trading $29.77, up $0.20 or +0.68%.

Testing the 200-Day Moving Average

Silver’s climb places it near the 200-day moving average at $29.83, a pivotal technical threshold. A decisive break above this level could trigger additional buying, pushing prices toward the 50% retracement level at $30.54. This breakout may lead to accelerated upward momentum as technical traders respond to the shift in price action.

Gold’s recent performance provides further insight into precious metal trends, with gold also testing key technical levels around its 50-day moving average. The interplay between gold and silver often reflects broader sentiment across the metals market. Gold prices recently found support from safe-haven inflows and a weaker dollar, reinforcing similar underlying conditions that could benefit silver in the near term.

Support from Lower Yields and Industrial Demand

UBS analysts highlighted that lower real U.S. yields and strengthening global industrial production are expected to provide a favorable environment for silver in 2025. These factors are likely to bolster demand, reinforcing silver’s dual role as both an industrial metal and a store of value. UBS projects silver to trade between $36 and $38 per ounce in 2025, reflecting confidence in the broader economic recovery and increased industrial activity.

Similarly, gold has been supported by declining Treasury yields, which reduce the opportunity cost of holding non-yielding assets like precious metals. As the Federal Reserve signals a cautious approach to rate cuts in 2025, yields may continue to trend lower, benefiting silver as well.

Geopolitical Uncertainty Boosts Safe-Haven Appeal

Geopolitical tensions are another factor supporting both silver and gold. Recent conflicts, including Israeli airstrikes in Gaza and Russian drone attacks on Kyiv, have heightened uncertainty, increasing demand for safe-haven assets. Investors often turn to silver alongside gold during periods of geopolitical stress, adding further upside potential for the metal.

Analysts have noted that market participants are also pricing in potential inflationary pressures tied to fiscal policies. Silver, like gold, is seen as a hedge against inflation, which could become more relevant if global economic conditions shift toward higher prices and supply chain constraints.

Market Outlook and Forecast

Silver’s near-term outlook hinges on its ability to surpass the 200-day moving average. A successful breakout above $29.83 could pave the way for further gains, with $30.54 emerging as the next key resistance level. Conversely, failure to breach resistance could lead to price consolidation, with support likely around $28.75.

As the year progresses, lower yields, improving industrial production, and ongoing geopolitical risks are expected to underpin silver prices. The dollar’s performance will also play a role, as any sustained weakness could add further support to precious metals. Traders should monitor technical levels closely while keeping an eye on broader macroeconomic trends that may influence market sentiment.

More Information in our Economic Calendar.