Industrial Demand Surge May Propel Silver Above $29.10: Market Analysis
September 12, 2024Silver Price Outlook: Silver’s Strength Persists on Technical Analysis
September 14, 2024The price of silver (XAG/USD) has seen a significant increase this week, rising to $30.06, driven by strong worldwide demand and speculations of a potential rate cut by the Federal Reserve. Factors contributing to this surge include the expanding industrial use of silver and the upward trajectory of gold prices, which often prompt investors to turn to silver as a more cost-effective option. In addition, heightened purchasing activity from China, the largest consumer of silver globally, has played a key role in boosting the metal’s value. The crucial role of silver in renewable energy, particularly in the manufacturing of solar panels, has further stimulated demand. As investments in renewable energy projects continue to grow on a global scale, the consumption of silver within the industry is anticipated to rise correspondingly. Nord Precious Metals Mining Inc. has recently disclosed a significant increase in silver grades from metallurgical assessments of its Miller Creek tailings. While historical assays indicated an average of 213 grams per tonne, the latest findings reveal a higher average of 282 grams per tonne, suggesting that the actual silver content is greater than initially estimated. This development has the potential to generate heightened market interest and contribute to an increase in prices. Furthermore, the possibility of a 50-basis-point cut in interest rates by the Federal Reserve in the upcoming week is also bolstering silver prices. There is a 41% probability of such a cut, as indicated by the CME FedWatch Tool, marking a substantial rise from the 14% probability earlier in the week. Lower interest rates generally enhance the attraction of non-yielding assets like silver to investors, thereby boosting demand. Recent economic data from the United States, such as the uptick in the Producer Price Index (PPI) and an increase in jobless claims, has heightened anticipation regarding the Federal Reserve’s impending actions. This speculation is further fueled by global trends, with the European Central Bank recently reducing its main interest rate and the Bank of England potentially following suit. These developments enhance the appeal of silver as a hedge against inflation and economic uncertainty. Given the prevailing industrial demand for silver and the evolving economic landscape, investors are monitoring the metal closely, particularly in light of the global transition toward renewable energy and potential adjustments in monetary policy. The short-term forecast indicates that silver’s bullish momentum persists around $30, with immediate resistance at $30.12 and support at $29.19. A breakthrough above $30.12 could hint at further price increases, while a failure to do so might lead to a corrective phase. The technical outlook suggests that silver is currently trading at $29.99 and is exhibiting a cautious stance. The immediate resistance level is noted at $30.12, with potential further resistance at $30.53 and $30.92 if this level is surpassed. Conversely, if the price fails to maintain itself above $30, a bearish correction could ensue, especially with a triple top pattern emerging on the chart. Immediate support levels are situated at $29.19 and $28.70, with strong medium-term support provided by the 50-day EMA at $28.78 and the 200-day EMA at $28.82. An inflection below $29 might herald a downward shift in momentum.