Silver Price Forecast: Neckline failure keeps bears in control

Silver prices have risen by over 1% despite trading below the 'head and shoulders' neckline, suggesting a possible downturn in the short-term. Currently, XAG/USD is priced at $64.24, having bounced off daily lows of $62.94. The metal is likely to remain in a sideways trading range if it fails to surpass the neckline around $64.10-$64.15, with bearish momentum persisting.

Even though Silver shows positive movement for the day, the Relative Strength Index (RSI) remains below the neutral 50 level, indicating an overall downward trend. If the XAG/USD price moves above $65.00, it may pave the way for a recovery towards the 100-day Simple Moving Average (SMA) of $66.94. With further strength, bulls could target the $67.00 level, and next, the $70.00 mark.

However, the 200-day SMA of $73.05 awaits above. On the downside, XAG/USD's first support is the $64.00 mark. Should bearish momentum intensify, sellers could target the 50-day SMA at $62.55 before aiming for the July 22 high-turned-support at $61.01. A breach of this latter support level would expose the $60.00 level. Silver is a popular investment choice for diversifying portfolios due to its intrinsic value and potential role as a hedge against high inflation.

Investors can acquire physical Silver, such as coins or bars, or trade it through Exchange Traded Funds (ETFs) that track its price on international markets. Silver prices fluctuate based on various factors. Geopolitical instability or concerns about a deep recession can cause Silver prices to surge due to its perceived safe-haven status, though to a lesser extent than Gold.

As a yieldless asset, Silver typically appreciates when interest rates are low. Its price is also influenced by the US Dollar (USD), as it is denominated in dollars (XAG/USD). A strong USD typically keeps Silver prices low, whereas a weaker USD could drive prices higher. Other factors impacting Silver prices include investment demand, mining supply, and recycling rates.

Silver's industrial uses, particularly in electronics and solar energy, contribute to price movements when demand surges or declines. The US, Chinese, and Indian economies significantly impact Silver prices, as their industrial sectors heavily rely on the metal for various processes. In India, consumer demand for Silver jewelry also plays a crucial role in determining prices.

Silver prices often follow Gold prices, as both are considered safe-haven assets. The Gold/Silver ratio, which indicates the number of ounces of Silver needed to equal the value of one ounce of Gold, can help investors determine the relative valuation between the two metals.