Silver (XAG) Daily Forecast: Can Strong Demand Offset Dollar Pressure Below $30.65?

Market Overview

Silver (XAG/USD) remained under pressure on Friday, trading at around $30.32 as the US Dollar strengthened. The metal’s recent decline comes as traders closely monitor the upcoming US October Retail Sales report and potential signals from the Federal Reserve about the future of interest rates.

Despite the dollar’s strength weighing on silver, analysts believe the metal’s losses may be cushioned by robust industrial demand.

According to the Silver Institute and Metals Focus, demand for silver in industrial applications is expected to grow by 7% year-over-year in 2024, reaching a record 700 million ounces.

This rising demand could help counterbalance downward pressure from the dollar, particularly as silver is a key material in electronics, solar panels, and other high-growth sectors.

China’s Economic Impact and Stimulus Measures

China, one of the world’s largest silver consumers, recently unveiled a 10 trillion Yuan debt package to alleviate local government financing challenges and support economic growth. However, the absence of direct stimulus disappointed investors, leaving some uncertainty about silver’s industrial demand from China.

On a positive note, China’s October retail sales exceeded expectations, rising by 4.8% compared to the forecasted 3.8%, while industrial production grew by 5.3%.

The National Bureau of Statistics has indicated that consumer expectations are improving, and there are plans to further bolster domestic demand. Still, silver prices are likely to stay pressured until more concrete measures signal a sustained demand recovery.

Rising Demand and Supply Shortfall Could Support Prices

A potential silver market shortfall could also limit price declines. Analysts are forecasting a physical silver deficit of approximately 182 million ounces in 2024, marking the fourth consecutive year of market shortage.

This persistent supply gap, coupled with strong industrial demand, suggests that while silver prices may face pressure from broader economic uncertainties, demand fundamentals could help stabilize the market.

As silver remains impacted by the US Dollar and economic signals, analysts suggest the metal’s strong industrial demand and supply deficits will be key factors supporting prices in the coming year.

Short-Term Forecast

Silver’s near-term outlook remains bearish below the $30.65 pivot, with support at $29.71. Rising industrial demand may limit losses amid dollar-driven pressure.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $30.32, down 0.38%, with a bearish bias as it struggles to break above the $30.65 pivot point, which also aligns with the 50-day EMA. This level acts as a key resistance; if prices remain below it, the downward trend could intensify.

Immediate support lies at $29.71, with further support levels at $29.19 and $28.67 if selling pressure continues. On the upside, silver needs to climb past the $31.10 resistance to hint at any recovery.

Overall, as long as silver remains below $30.65, the bearish outlook holds, making near-term rallies unlikely without stronger upward momentum.