Silver (XAG) Daily Forecast: Russia’s Central Bank Silver Reserves Boost Bullish Sentiment

Market Overview

Russia’s Central Bank is set to acquire silver as part of its reserve strategy for the first time, according to details from the country’s newly released Draft Federal Budget. This marks a notable expansion from the bank’s traditional focus on gold, platinum, and palladium, aiming to diversify its portfolio amidst growing global economic uncertainties.

Russia, the world’s eighth-largest silver producer with an annual output of 38.5 million ounces, appears keen to capitalize on the undervaluation of silver compared to other precious metals.

The prices of gold and palladium have significantly outpaced silver since 2011, suggesting silver could be a “strategic bargain” for Russia. On April 29, 2011, COMEX closed silver at $48.59 an ounce, whereas it now trades substantially lower.

“Silver’s rising industrial demand, particularly in photovoltaic and electrical conductivity applications, is driving tight supply conditions,” noted analysts from The Silver Institute. The institute projects a combined shortfall of 663 million ounces in global silver supply from 2022 through 2024.

In recent years, central banks worldwide have aggressively added to their gold reserves amid economic uncertainties, with nations like Poland now holding more gold reserves than Great Britain. Russia’s move to include silver adds to its recent expansions into platinum and palladium holdings, leveraging its status as a top global producer of these metals.

Market Implications and Demand Outlook

Experts speculate that Russia’s decision to acquire silver could drive its price upward by at least 50% in the next 24 months. With silver’s increasing industrial applications and tight supply conditions, Russia’s strategic move could encourage other central banks to follow suit.

Market participants will closely watch economic data from China and the U.S., as shifts in global demand and policy could influence the price trajectory for industrial and precious metals.

If successful, Russia’s diversification into silver could be a significant turning point for the global precious metals market.

Short-Term Forecast

Silver’s bullish trend gains traction, with key support holding firm at $33.33. A potential breakout past $34.26 could signal continued gains, supported by rising demand.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is currently trading around $34, showing solid upward momentum. The key pivot point is set at $33.33, and as long as prices stay above this level, the bullish sentiment remains intact.

On the 4-hour chart, silver has been forming an upward channel, breaking above the $32.50 mark, indicating a potential continuation of this trend. Additionally, the emergence of a classic “three white soldiers” pattern further strengthens the likelihood of continued gains.

Immediate resistance is $34.26, followed by $34.69 and $35.15. On the downside, key support sits at $32.96, with additional levels at $32.35 and $31.87. With the 50-day EMA at $31.64 and the 200-day EMA at $30.87, technical indicators suggest a solid bullish bias unless the price dips below $33.33, which could trigger a sharp selling trend.