Silver (XAG) Daily Forecast: Demand for Green Tech Can’t Halt Slide, Silver Hits $29.83

Market Overview

During Thursday’s Asian session, silver (XAG/USD) extended its decline, pressured by a robust U.S. dollar and weaker short-term silver demand. Despite a positive long-term outlook linked to green economy growth, silver remains on a two-day losing streak.

Silver Demand and Deficit Expected to Boost Prices

According to a recent report by the Silver Institute and Metals Focus, the physical silver market is projected to face a deficit of 182 million ounces in 2024, marking the fourth consecutive year of shortage. The growing gap between supply and demand could ultimately lead to higher prices, especially as the demand for silver rises in eco-friendly applications.

Industrial demand for silver, driven largely by photovoltaic (PV) solar technology, is projected to increase by 7% year-over-year, reaching 700 million ounces. Total demand is expected to reach 1.21 billion ounces in 2024, a 1% increase despite anticipated declines in photography, jewelry, and physical investment sectors.

This trend highlights the growing role of green technologies in sustaining demand.

Strong U.S. Dollar Adds Short-Term Pressure on Silver

The U.S. dollar’s strength, fueled by optimism surrounding pro-growth policies from President-elect Donald Trump, has put additional pressure on silver prices. Trump’s recent election victory has reignited expectations for inflationary tariffs and other growth-oriented policies, further boosting the dollar and dampening demand for commodities priced in USD.

October’s U.S. Consumer Price Index (CPI) report, indicating persistent inflation, has also contributed to the dollar’s gains. The CPI rise bolstered the dollar as investors anticipate a steady interest rate environment, adding pressure on silver’s price in the short term.

Silver’s 2024 Price Surge Driven by Green Economy

Despite recent declines, silver prices have risen 29% this year, trading near $35 per ounce—a level last seen in 2012. The average silver price in 2023 was $23.35 per ounce, but this year’s surge reflects strong investor interest.

In 2024, PV sector demand alone increased by 64% to 193.5 million ounces, underscoring silver’s role in renewable energy.

Short-Term Forecast

Silver remains under pressure, trading near $29.83, as a robust U.S. dollar and weaker short-term demand weigh on prices. Key support is at $29.71.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is currently trading at $29.83, down 1.61%, showing continued downward momentum. Key support rests at $29.71, with additional support levels at $29.19 and $28.67 if selling persists. The pivot point at $30.15 serves as a critical line; remaining below this level reinforces the bearish bias.

Immediate resistance is at $30.57, with further resistance at $31.11 and $31.55 if a rebound occurs. The 50-day EMA at $30.84 and the 200-day EMA at $31.88 confirm a longer-term bearish trend.

Bearish engulfing patterns and a “three black crows” candlestick formation suggest a possible continuation of the selling trend. Overall, staying below $30.15 may keep sellers in control.