Silver (XAG) Daily Forecast: Industrial Demand Grows but Dollar Gains Weigh

Market Overview

Silver prices (XAG/USD) held steady near $30.27 per troy ounce on Tuesday, slipping to an intra-day low of $29.98 as a stronger US dollar pressured the metal. The dollar’s gains followed President-elect Donald Trump’s announcement of tariffs: 25% on imports from Mexico and Canada, and 10% on Chinese goods, a move that reduced foreign demand for dollar-denominated assets like silver.

Adding to the bearish sentiment, optimism in the bond market contributed to silver’s stagnation.

Scott Bessent’s selection as US Treasury Secretary reassured markets with his gradual approach to trade restrictions, further stabilizing the bond market and reducing interest in non-yielding assets like silver.

Industrial and Investment Demand Remains Strong

Despite near-term challenges, silver’s long-term demand outlook remains robust. The Silver Institute projects a 1% increase in global silver demand in 2024, reaching 1.21 billion ounces. Record-breaking industrial demand from the solar and electronics sectors, coupled with a rebound in jewelry consumption, are key drivers.

India, the largest consumer of silver, has also seen its imports double to 4,554 metric tons in the first half of 2024, reflecting strong industrial and investment interest.

On the supply side, a 4% reduction in the global silver deficit to 182 million ounces is expected, driven by a 5% increase in recycling and higher mine production from Mexico, Chile, and the US. This trend is likely to cap significant price surges, balancing market supply and demand.

Federal Reserve and Market Dynamics

Federal Reserve commentary added a layer of support for silver prices. Chicago Fed President Austan Goolsbee hinted at continued rate cuts, while Minneapolis Fed President Neel Kashkari mentioned the possibility of further easing at the December meeting.

Investors now await the Fed’s November meeting minutes for clearer monetary policy signals.

While strong demand from industries offers hope, a robust dollar and increasing silver supply could limit upside momentum, keeping silver prices balanced in 2024.

Short-Term Forecast

Silver (XAG/USD) holds near $30.27, with immediate support at $29.99 and resistance at $30.81. A breakout below $30.42 may trigger further downside momentum.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $30.27, down 0.04%, as it consolidates below the pivot point at $30.42. Immediate support lies at $29.99, with deeper levels at $29.68 and $29.33. On the upside, resistance is seen at $30.81 and extends to $31.07, where sellers may look to re-enter.

The 50-day EMA at $30.91 and the 200-day EMA at $31.46 reinforce a bearish outlook. A breakout below $30.42 could signal further downside, while a move above this level may revive bullish momentum.

For now, silver remains under pressure, and traders should monitor price action near the pivot for clear directional cues.