Silver (XAG) Daily Forecast: Key Support at $30.83 as China’s Policies Weigh on Industrial Silver Demand

China’s economic policy has amplified concerns in the silver market. “Industrial metals like silver are sensitive to interest rate policies in China, which drives a significant portion of global manufacturing,” noted an analyst at a leading brokerage.

Geopolitical Risks Offer Limited Safe-Haven Appeal

While silver’s industrial demand falters, its safe-haven appeal saw some support amid rising geopolitical tensions. Ukraine’s use of US-supplied missiles to strike Russian territory marked a significant escalation in the Russia-Ukraine war.

However, market anxiety eased after Russian Foreign Minister Sergei Lavrov reassured efforts to prevent nuclear escalation, stabilizing investor sentiment.

Impact of a Strong Dollar and Fed Policy

On the US front, the dollar remains strong but saw slight profit-taking following a recent rally fueled by expectations of reduced rate cuts by the Federal Reserve. A stronger dollar typically pressures silver prices, making it less attractive to international buyers.

Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, commented on Tuesday, “The Fed’s confidence in inflation reaching its 2% goal will shape rate decisions moving forward.”

Schmid also highlighted the potential for further tightening if inflation pressures persist.