Silver's technical indicators hint at potential bullish reversal against gold. Will XAG/USD break out and catch up to XAU/USD's recent surge?
Chart of the week – Silver (XAG/USD)
In the past two weeks, Gold (XAU/USD) has continued to scale fresh all-time highs since breaking above its previous all-time high of US$2,790 on 30 October 2024. Also, it is now on track to record a seventh consecutive weekly gain since the week of 30 December 2024 with a current intraday price of US$2,925 at this time of the writing.
In contrast, its “less shiny” precious metal counterpart, Silver (XAG/USD) has lagged against Gold (XAU/USD), and with a current intraday price of US$32.40, it is still 54% below its current all-time of US$49.81 printed in April 2011.
Fig 1: Silver (XAG/USD) medium-term trend as of 14 Feb 2025 (Source: TradingView)
Interestingly, several positive technical elements have emerged that suggest Silver (XAG/USD) may undergo a potential bullish catch-up.
Firstly, recent price actions of Silver (XAG/USD) have managed to trade above its 50-day and 200-day moving averages since 29 January 2025 after a retest on the 200-day moving average from 18 December 2024 to 27 January 2025 which suggests that its medium-term uptrend phase in place since 3 October 2023 low remains intact.
Secondly, the daily RSI momentum indicator of Silver (XAG/USD) has continued to print a series of “higher lows” since 27 January 2025 that are hovering above the 50 level. These observations represent a bullish momentum condition.
Thirdly, the ratio chart (relative strength) of Silver versus Gold has managed to stage a recent rebound from its major horizontal support after a third retest on 11 February 2025 where such similar observation in the past on 27 February 2024 managed to see the price actions of Silver (XAG/USD) staged a significant impulsive bullish upmove sequence.
Watch the US$30.20 key medium-term pivotal support with the next medium-term resistances coming in at US$33.24 and US$35.36/77 (also the upper boundary of the major ascending channel).
However, a breakdown with a daily close below US$30.20 invalidates the bullish scenario to kickstart a potential medium-term corrective decline towards the next medium-term supports at US$28.00 and US$26.25.
