Silver (XAG) Daily Forecast: Rising Industrial Demand Meets Resistance Near $34.00

Market Overview

Silver (XAG/USD) is trading around $33.76, facing resistance at $34.00, even as industrial demand surges. Investor interest has increased, driven by market uncertainties linked to geopolitical tensions and the upcoming U.S. election.

With U.S. Treasury yields on the decline, the dollar has weakened, further boosting silver’s appeal as a safe haven. However, speculation on possible Federal Reserve policy easing could limit silver’s gains if the dollar stabilizes.

Investors remain cautious ahead of significant U.S. economic reports, including Q3 GDP, the Personal Consumption Expenditures (PCE) Price Index, and Nonfarm Payrolls (NFP).

These reports are likely to offer key insights into the Federal Reserve’s policy direction, particularly concerning interest rates.

Silver Market Dynamics: Supply Constraints and Global Demand

While silver prices have risen from the low $20s to a high of $32.52 in May 2023, analysts predict a 16% drop in physical silver investment this year, primarily due to weaker demand in the U.S. and Europe.

Factors such as economic uncertainty, rising interest rates, and changing investment strategies are curbing demand in these regions.

In contrast, demand from India and China remains strong, providing a key support for silver. The silver market is expected to face a notable supply deficit of approximately 179.5 million ounces this year, underscoring ongoing supply constraints.

While this deficit reflects tight supply, short-term trading trends appear to overshadow these fundamentals, creating a disconnection between market conditions and investor sentiment.

Silver’s Market Outlook Amid Key Economic Indicators

The U.S. dollar continues to experience downward pressure from falling Treasury yields, supporting silver prices and attracting safe-haven interest. Investor caution remains high as they watch for the Federal Reserve’s approach to rate adjustments, particularly given recent strong economic data.

A limited rate-cut scenario could stabilize the dollar, potentially capping silver’s gains.

Investors are also focusing on upcoming data releases, such as the Consumer Confidence Index and Job Openings and Labor Turnover Survey (JOLTS), which could influence the Fed’s rate decisions and impact silver’s appeal.

Short-Term Forecast

Silver is poised near $33.76, facing immediate resistance at $34.08. Short-term momentum hinges on a breakout above this level, with downside support around $33.14.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is currently trading at $33.76, finding solid resistance just above at $34.08 due to a double-top pattern. This technical formation suggests that silver could face some headwinds moving higher in the short term.

A move above $34.08, however, would likely attract fresh buying interest, opening the path toward $34.30 and possibly $34.55.

On the downside, immediate support is seen at $33.14, with the 50-day EMA at $33.69 and the 200-day EMA at $33.32, providing a cushion for any dips.

If silver fails to maintain levels above $33.70, we might see a retracement toward these support zones.