Silver (XAG) Daily Forecast: Industrial Demand and Fed Expectations Drive Prices Toward $32

Market Overview

Silver prices (XAG/USD) extended their upward momentum, reaching $32.00 per troy ounce on Friday, driven by safe-haven flows and strong industrial demand. The metal, which has surged nearly 34% this year, remains a standout in the precious metals sector.

Silver’s rally has been bolstered by expectations that the U.S. Federal Reserve will cut interest rates by 50 basis points by the end of 2024, further enhancing its appeal.

Rising Industrial Demand and Supply Shortages

A key factor behind silver’s rise is the growing demand for industrial applications, particularly in electronics and renewable energy. Panelists at the 2024 LBMA Precious Metals Conference forecast a supply deficit of 215.3 million ounces, marking the second-largest shortfall in over two decades.

“The supply-demand imbalance is becoming more pronounced,” noted Mitchell Krebs, CEO of Coeur Mining. The mining industry is struggling to meet this increasing demand, with few new sources of silver coming online.

While recycling efforts could ease some of the strain, current technologies are not advanced enough to close the gap significantly. With industrial use accounting for nearly 50% of silver’s demand, the supply shortage is expected to push prices even higher, potentially reaching $45 an ounce—a 40% increase from current levels.

First Majestic Silver’s Production and Market Impact

In the third quarter of 2024, First Majestic Silver (NYSE: AG) produced 5.5 million silver equivalent ounces, a 4% increase from the previous quarter. This brings the company’s year-to-date output to 15.9 million silver equivalent ounces, about 72% of their 2024 production target.

The company’s three underground mines in Mexico—Santa Elena, San Dimas, and La Encantada—contributed to this performance.

Despite strong production numbers, First Majestic’s stock dropped 1.45% to $8.83, possibly reflecting broader market concerns. However, the company’s increased output could stabilize or lift silver prices as supply tightens, provided demand remains robust.

Short-Term Forecast

Silver prices are expected to rise, with key resistance at $32.35. A sustained break above the $31.73 pivot supports further bullish momentum, targeting $32.72 next.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is continuing its upward momentum, currently trading at $31.90, up 0.67% for the session. On the 4-hour chart, silver hovers above the pivot point at $31.73, signalling a strong bullish trend.

Immediate resistance is $32.35, with the next key levels to watch at $32.72 and $33.09. Meanwhile, the 50-day EMA at $31.47 provides a solid support base, while the 200-day EMA sits further down at $30.81.

As long as silver remains above the $31.73 pivot, buyers are likely to stay in control. However, a break below this level could trigger a sharper pullback, with immediate support at $31.31 and $30.90.