Silver Price Forecast: XAG/USD bears have the upper hand below $64.75-$64.85 confluence

Silver (XAG/USD) begins the week with a lackluster performance, trading within a tight range above the $64.00 level as market participants display caution ahead of critical central bank announcements. The U.S. Federal Reserve (Fed) is set to release its interest rate decision on Wednesday, followed by Bank of England (BoE) deliberations on Thursday and a Bank of Japan (BoJ) update on Friday.

Traders will be keenly observing central bank guidance, which will significantly impact demand for the non-interest-bearing XAG/USD pair. From a technical standpoint, the white metal trades below the 200-period Simple Moving Average (SMA) on the 4-hour chart at $64.91 and the 38.2% Fibonacci retracement level at $64.78, both of which act as bearish barriers.

Furthermore, the Moving Average Convergence Divergence (MACD) indicator stays below zero, indicating a slight negative reading. This, coupled with the Relative Strength Index (RSI) hovering around 42, signals diminishing momentum as the market struggles to regain upward momentum. Consequently, any substantial bullish attempts would encounter resistance at the 38.2% retracement at $64.78, followed closely by the 200-period SMA at $64.91.

A further upward move could propel XAG/USD towards the next key hurdle near the 23.6% Fibonacci retracement at $67.15 and the broad cycle high region around $70.99. On the downside, initial support is anticipated at the 50% retracement near $62.86, preceding the 61.8% Fibonacci level at $60.94, with deeper support at $58.21 and $54.74.

(Technical analysis for this article was assisted by an AI tool.) Silver is a precious metal widely traded by investors, often utilized as a store of value and a means of exchange. Despite its lower popularity compared to Gold, Silver can serve as a valuable diversification tool for investment portfolios due to its intrinsic worth or as a potential hedge during periods of high inflation.

Investors can acquire physical Silver, either in the form of coins or bars, or trade it through Exchange Traded Funds (ETFs) that mirror its price on global markets. Silver prices are influenced by various factors, including geopolitical instability, recession fears, its safe-haven status, lower yields, fluctuations in the U.S. Dollar (USD), investment demand, mining supply – Silver is considerably more abundant than Gold – and recycling rates.

Its applications in industries such as electronics and solar energy also impact its price. A surge in demand can elevate Silver prices, while a decline typically lowers them. Silver's price movements are closely tied to those of Gold, as both are viewed as safe-haven assets. The Gold/Silver ratio, which represents the number of Silver ounces required to equal the value of one Gold ounce, can assist investors in determining the relative valuation of both metals.

A high ratio may signal undervaluation of Silver or overvaluation of Gold, while a low ratio might indicate undervaluation of Gold relative to Silver. Haresh Menghani is a meticulous analyst with over a decade of experience examining global financial markets. AUD/USD kicks off the new week weak, remaining near the mid-0.7100s as the U.S. Dollar strengthens on rising Federal Reserve rate-hike expectations, supported by the U.S. Consumer Price Index (CPI).

Additionally, escalating Middle East tensions and Strait of Hormuz conflicts bolster the safe-haven USD. However, hawkish Reserve Bank of Australia (RBA) forecasts may help temper further AUD declines. USD/JPY consolidates near a seven-month low following last Tuesday's trading, as market participants await the Federal Open Market Committee (FOMC) decision on Wednesday and the Bank of Japan (BoJ) policy update on Friday.

Meanwhile, a more aggressive stance on the BoJ's normalization path bolsters the Japanese Yen, while rising Federal Reserve rate-hike expectations and geopolitical uncertainties contribute to the USD's resilience, driving the pair's subdued performance at the start of the week. Gold struggles to capitalize on Friday's slight recovery from sub-$4,300 levels and begins the week subdued as traders take a wait-and-see approach ahead of a series of central bank events.

Meanwhile, recent U.S. inflation data reinforces expectations of a Federal Reserve rate hike, limiting the non-yielding gold price. Moreover, escalating tensions between the U.S. and Iran act as a tailwind for the safe-haven U.S. Dollar, keeping XAU/USD bulls in check.