Silver Price Forecast: XAG turns bullish, eyes 200-day SMA

Silver prices surged over 1.40% on Wednesday, as the latest US inflation report indicated cooling prices, moving towards the Federal Reserve's 2% target. The XAG/USD pair traded at $65.53, reaching a daily high of $66.80. Technically, silver is neutral to upward biased, with bulls gaining strength as they broke the 50-day SMA at $61.60 and the July 6 high at $63.28, moving closer to reclaiming the $65.00 level.

Momentum still favors further upside, with resistance at the August 10 high at $66.59. Upon surpassing this, the next target is the 100-day SMA at $68.87, followed by the 200-day SMA at $71.47. A drop below the 50-day SMA could lead to a bearish resumption, challenging the July 6 high-turned support at $63.28. Silver is a precious metal used as a store of value and hedge during high-inflation periods, often traded as an alternative to gold when diversifying investment portfolios.

Factors influencing silver prices include geopolitical events, interest rates, the US Dollar's strength, investment demand, mining supply, and recycling rates. Silver's industrial applications in electronics, solar energy, and other sectors can also impact its price. The Gold/Silver ratio can help determine relative valuation between the two metals.

Analysts suggest a high ratio may indicate undervalued silver or overvalued gold, while a low ratio could suggest the opposite.