Silver (XAG) Daily Forecast: Can China’s Rising Demand Break Silver’s Downward Trend?

Market Overview

Silver (XAG/USD) is facing challenges in rebounding from early losses, currently trading around $27.92 after hitting an intra-day low of $27.88.

This decline is largely due to a stronger US dollar and increased expectations for aggressive Federal Reserve rate cuts, spurred by mixed economic data.

Traders are now closely watching key reports, including Wednesday’s JOLTS Job Openings and the Fed’s Beige Book, as well as Friday’s highly anticipated August Nonfarm Payrolls (NFP) data.

These releases could shape market expectations about the timing and magnitude of potential Fed policy shifts.

China’s Rising Silver Demand Could Push Prices Higher

On a more positive note, China’s growing demand for silver could support future price gains. According to the Shanghai Metals Exchange, silver prices in China are about 10% higher than in the West, signaling robust domestic demand.

In the last year, Chinese silver imports have surged, with imports exceeding 400 tons in both June and July, compared to the previous year’s monthly average of 200 tons.

China’s booming solar panel industry and tech sector are driving this increased demand, and as global production falls short of demand, analysts warn of a potential “silver squeeze.”

If silver continues to be under-supplied, this could push prices higher, impacting industries such as electronics and solar energy, particularly in Western markets.

Short-Term Forecast

Silver remains under bearish pressure, trading below $28.09. Key support is at $27.54, with resistance at $28.66. A break above $28.09 could shift sentiment to bullish.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $27.92, down 0.43%, reflecting continued bearish sentiment. The 4-hour chart shows silver struggling to hold above the pivot point at $28.09. Immediate resistance sits at $28.66, with further resistance levels at $28.98 and $29.42. On the downside, support is found at $27.54, followed by $27.24 and $26.92.

Technical indicators suggest a bearish outlook. The 50-day Exponential Moving Average (EMA) at $28.65 and the 200-day EMA at $28.90 are acting as significant resistance, reinforcing downward pressure.

The downward channel is also maintaining a bearish bias. If prices remain below $28.09, we could see further declines. However, a break above this level might signal a bullish reversal.