Silver (XAG) Daily Forecast: Safe-Haven Demand Surges as China’s Economic Outlook Shifts

Market Overview

Silver (XAG/USD) is holding steady at around $30.85 per ounce during Monday’s Asian session, continuing its upward trend. The surge is primarily fueled by growing speculation that the Federal Reserve may implement a significant 50 basis point rate cut in its upcoming meeting.

With the US dollar weakening and Treasury yields falling, Silver becomes increasingly attractive to international buyers. Priced in dollars, Silver benefits from a weaker dollar, making it cheaper for buyers using other currencies and boosting global demand.

Fed Rate Cut Expectations Weaken US Dollar

The US Dollar Index (DXY) currently trades near 100.81, reflecting the broad-based dollar weakness. Investors are anticipating a substantial rate cut, making dollar-denominated assets less appealing.

Additionally, yields on 2-year and 10-year US Treasury bonds are at 3.58% and 3.65%, respectively. This softer interest rate environment adds to the dollar’s declining appeal, further driving demand for Silver as a safe-haven asset.

China’s Economic Outlook

China’s demand for Silver remains a crucial factor in its price trajectory. Recent economic data from China has been mixed, causing uncertainty in the markets.

However, Silver’s critical role in industrial applications like electronics, solar panels, and automotive components ties its demand closely to China’s economic performance.

As one of the largest global manufacturing hubs, any uptick in China’s industrial activity could lead to higher Silver consumption. Conversely, weaker industrial performance might curtail demand.

Short-Term Forecast

Silver (XAG/USD) is trading at $30.85, nearing key resistance at $31.10. A break above could trigger further gains, while remaining below keeps the short-term outlook bearish.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $30.85, up 0.87% in today’s session, but it faces strong resistance at $31.10. If Silver can break above this key pivot point, it could open the door for further upside, with resistance levels at $31.42 and $31.74 in sight.

On the downside, immediate support lies at $30.39, followed by deeper support at $29.95. The 50-day EMA at $29.24 continues to support the bullish trend, but prices remain vulnerable below $31.10. Traders should watch this critical level closely, as a break above could shift momentum toward the bullish side, while staying below keeps the short-term outlook bearish.