Silver (XAG) Daily Forecast: Can Samsung’s Battery Demand Lift Prices from $28.40?

Market Overview

Silver prices (XAG/USD) struggled to recover from early losses, trading near $28.40 and hitting an intraday low of $28.33. This downturn is largely driven by growing concerns over industrial demand amid signs of China’s economic slowdown.

The Chinese Manufacturing Purchasing Managers’ Index (PMI) fell to 49.1 in August, down from 49.5 in July, and below the expected 49.5. This marks a contraction in China’s manufacturing sector, adding further downward pressure on silver, a key industrial metal.

Samsung’s Silver-Based Batteries Could Revive Silver Demand

Despite the bearish sentiment, silver prices might see a rebound due to potential increased demand from Samsung’s innovative solid-state batteries. These next-generation batteries, which are set to revolutionize the electric vehicle (EV) industry, require significant amounts of silver.

Each battery could contain up to 1 kilogram of silver, and if just 20% of vehicles adopt this technology, global silver demand could rise by 16,000 metric tons. This anticipated surge in demand can potentially drive silver prices higher, offering a silver lining for investors.

Investment opportunities are also emerging through silver exchange-traded funds (ETFs) such as the iShares Silver Trust (SLV) and the Physical Silver Shares ETF (SIVR). Managed by BlackRock, SLV holds $13.57 billion in assets and has gained 23% year-to-date. With an expense ratio of 0.50%, it remains a popular choice among investors.

Meanwhile, SIVR, managed by abrdn PLC, has risen 22.8% year-to-date, offering a lower expense ratio of 0.30%, though it sees less trading volume compared to SLV.

China’s Economic Woes Continue to Weigh on Silver Prices

On the downside, China’s economic struggles remain a significant concern for silver prices. The country’s manufacturing PMI indicates a contraction, reflecting reduced industrial activity and a subsequent dip in demand for silver.

Although there was a slight improvement in the Non-Manufacturing PMI, rising to 50.3 from 50.2 in July, this modest growth in the services sector is insufficient to offset the manufacturing sector’s weaknesses.

In summary, while China’s economic slowdown is placing downward pressure on silver, the potential surge in demand from Samsung’s silver-based batteries could provide a much-needed boost, making silver a metal to watch closely in the coming months.

Short-Term Forecast

Silver prices (XAG/USD) will likely remain under pressure, trading around $28.40. The key pivot point at $28.49 must be breached for a potential bullish reversal; otherwise, a further decline towards $28.05 is expected.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $28.40, down 1.43% for the day, reflecting ongoing bearish sentiment. On the 4-hour chart, Silver hovers just below a critical pivot point at $28.49, reinforcing the downward pressure. Immediate resistance stands at $28.87, with further barriers at $29.26 and $29.68.

On the downside, key support levels are $28.05, followed by $27.76 and $27.49. The 50-day and 200-day Exponential Moving Averages (EMAs), positioned at $29.27 and $29.06, respectively, suggest continued selling pressure.

The appearance of a bearish engulfing pattern further underscores the likelihood of a downtrend. Silver remains bearish below $28.50, with a break above this level needed to shift the momentum towards a bullish outlook.