Silver (XAG) Daily Forecast: Momentum Strong at $29.35, Further Gains Ahead?

Market Overview

Silver (XAG/USD) continued its upward momentum during the European trading session on Wednesday, trading in the mid-$29.00s. This recovery follows the metal’s recent dip to its lowest level since May, driven by a dovish Federal Reserve stance, pressure on the US dollar, and geopolitical uncertainties, which have bolstered silver’s status as a safe-haven asset.

Samsung’s Solid-State Battery: A Game Changer for Silver Demand

According to retired investment professional Kevin Bambrough, Samsung’s new solid-state (SS) battery, incorporating silver as a key component, is set to drive significant demand for the metal.

This battery features a silver-carbon (Ag-C) composite layer that enhances performance, offering a 600-mile range, 20-year lifespan, and 9-minute charge time. Bambrough estimates that each battery pack could require around 1 kg of silver.

With 16 million EVs potentially adopting this technology, annual silver demand could rise by 16,000 metric tons—nearly two-thirds of current global production. This surge, coupled with ongoing demand from the solar industry, points to a bullish outlook for silver.

Essential Points

• Anticipation of a September Federal Reserve rate cut has boosted silver prices.
• Investors expect a 25 basis point rate reduction, leading to lower US Treasury yields and a weaker dollar.
• The CME Group’s FedWatch Tool shows a 70% probability of the rate cut, reflecting strong market sentiment.
• A Reuters poll suggests most economists anticipate 25 basis point cuts at each of the Fed’s three remaining 2024 meetings.
• Fed Governor Michelle Bowman warns inflation concerns may delay rate cuts, potentially limiting silver gains.
• Geopolitical tensions further drive demand for silver as a safe-haven asset, supporting the metal’s recent rally.

Short-Term Forecast

Silver (XAG/USD) continues its upward trend, trading near $29.53. The price is supported by bullish momentum, with key support at $29.34, indicating potential for further gains.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is currently trading at $29.53, up by 0.29% on the 4-hour chart. The metal has found solid support around the $29.34 level, which was previously a key resistance. This level is now acting as a strong base for silver’s continued upward movement.

The recent formation of doji candles, coupled with a bullish engulfing candle above $29.34, indicates that buyers are still in control, and the bullish momentum could continue.

Both the 50-day and 200-day Exponential Moving Averages (EMAs), at $28.58 and $28.70, respectively, reinforce this bullish outlook. If silver can maintain its position above $29.34, the next target to watch is $29.83.

However, if it dips below $29.34, we might see a quick sell-off. For now, the market looks favourable for further gains.