Silver (XAG) Daily Forecast: China’s Stimulus Expected to Boost Demand – Key Insights

Market Overview

Silver (XAG/USD) continued its downward trend on Friday, trading around $31.50 per ounce. The metal’s decline comes as U.S. Treasury yields climb, with the 2-year and 10-year yields reaching 4.20% and 4.33%, respectively.

Higher yields increase the opportunity cost of holding non-yielding assets like silver, which becomes less attractive to investors seeking returns. Additionally, a stronger U.S. dollar has made silver more expensive for foreign buyers, further reducing demand.

The U.S. Dollar Index (DXY) rose to around 104.50, supported by robust economic data and a recent Federal Reserve rate cut of 25 basis points, setting the benchmark range at 4.50%-4.75%.

Growing Industrial Demand Could Position Silver for Future Gains

Despite recent declines, analysts suggest that silver may outperform gold in the coming years due to its broad industrial applications. While gold has surged to record highs, silver has struggled to surpass the $30 mark.

However, analysts at UBS predict that by 2025, silver could reach between $36 and $38 per ounce, driven by demand in technology, electric vehicles, and renewable energy sectors.

“Silver’s industrial uses give it an edge in a growing economy,” said one analyst, pointing to its essential role in solar panels, electronics, and medical devices.

Some projections even suggest silver may hit $50 by 2025 and potentially reach $77 by 2028.

Chinese Economic Stimulus Expected to Boost Silver Demand

On the global front, China’s potential stimulus measures could add further support for silver. Following a recent meeting by the National People’s Congress Standing Committee, reports indicate that China’s stimulus package could exceed 10 trillion yuan.

As a key global manufacturer, China’s economic support is likely to boost demand for silver, widely used in electronics and renewable energy. Additionally, China’s trade surplus rose significantly in October to $95.27 billion, with exports surging by 12.7% year-over-year, surpassing expectations.

This robust trade performance underscores China’s economic strength and is likely to increase silver demand as the country continues its industrial growth.

As silver prices remain pressured by a strong U.S. dollar and rising yields, its long-term outlook hinges on industrial demand and China’s economic policies. With potential for growth in the technology and renewable energy sectors, silver could see stronger performance in the years ahead.

Short-Term Forecast

Silver’s short-term outlook remains bearish below the $31.82 pivot. Key support levels to watch include $31.25 and $30.89, while a break above $31.82 could spark bullish momentum.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $31.52, down 1.62%, and hovering just below a key pivot at $31.82. This level is crucial—remaining below it keeps the short-term outlook bearish, with immediate support nearby at $31.25.

Should silver dip further, we could see it test support at $30.89 or even $30.52.

On the upside, any move above $31.82 would signal potential bullish momentum, with resistance levels at $32.16 and $32.48. The 50-day EMA at $32.00 and the 200-day EMA at $32.57 hint at a bearish tilt, but a break above $31.82 could shift sentiment back to the upside.