As silver prices continue to rise, analysts analyze the technical points of the silver spot to US dollar exchange rate (XAG USD) and look forward to future price trends.
Silver prices maintained a bullish trend on Tuesday, May 13, climbing to around $33 per ounce at the time of writing. From a technical perspective, XAGUSD is still operating within an ascending channel.
From a technical perspective, silver prices are currently above a strong support level of $31.93, which may push it to break through the resistance level of $33.53. Any signs of breaking through this resistance level may attract buyers and support silver prices to approach the seven-month high of $34.55. On the downside, silver prices may test the support level of $31.93, so a break below this level may put silver prices at risk of bearishness and put pressure on XAGUSD to test the eight-month low of $28.00 hit on April 7.
The gold-silver ratio (i.e., the number of ounces of silver required to buy 1 ounce of gold) is an important indicator to measure the relative value of the two:
Current ratio: 98:1 (i.e., 98 ounces of silver for 1 ounce of gold), higher than 87:1 in early July 2024, and far beyond the historical normal range (40:1 to 60:1).
Market implications: The high ratio indicates that silver may be undervalued relative to gold, and there is potential for future catch-up. However, it should be noted that this indicator needs to be combined with other fundamental factors for comprehensive judgment, rather than an independent forecasting tool.
While the silver price forecast for 2040 is anyone’s guess, several different scenarios can still be considered. If the U.S. dollar remains the global reserve currency for the next two decades, then silver could easily trade above $50 by 2040.
