Silver Price Forecast: XAG/USD holds gains near $33.00 as Middle-East tensions rise
- Silver price rises as safe-haven demand strengthens amid rising Middle-East tensions.
- The United Nations is cutting its staff in Gaza following Israeli airstrikes that have resulted in hundreds of civilian casualties.
- Russian state media RIA Novosti reports that the US and Russia are set to release a joint statement on Tuesday.
Silver price (XAG/USD) pauses its four-day losing streak, trading around $33.10 per troy ounce during Asian market hours on Tuesday. The rebound is driven by increased safe-haven demand amid escalating geopolitical tensions.
The United Nations (UN) announced on Monday that it is reducing its international staff in Gaza by about a third following Israeli airstrikes that have killed hundreds of civilians, including UN personnel. After a two-month ceasefire brought relative calm to the 18-month war, Israel resumed its full-scale air and ground campaign against Hamas last Tuesday.
Palestinian health officials report nearly 700 fatalities since then, with total casualties in Gaza exceeding 50,000, nearly a third of whom were children, per Reuters.
Meanwhile, Russian state media RIA Novosti reports that a joint statement from the US and Russia is expected on Tuesday, following talks between their delegations in Riyadh that concluded on Monday. The discussions reportedly covered efforts to negotiate a Black Sea maritime ceasefire deal, among other issues.
Silver, however, faced headwinds due to a strengthening US Dollar (USD), driven by robust US economic data and cautious remarks from Federal Reserve (Fed) officials. The S&P Global Services PMI surged to 54.3 in March, a three-month high, up from 51.0 in February and surpassing market expectations of 50.8. The service sector rebounded sharply after hitting a 15-month low in February, while the Composite PMI climbed to 53.5, marking its strongest growth since December 2024.
Atlanta Fed President Raphael Bostic highlighted persistent economic uncertainty, warning that inflation progress may be slower than previously anticipated. Bostic revised his 2025 rate cut expectations downward, citing ongoing price pressures and trade-related risks.
Silver FAQs
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.
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.
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.
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.