Silver (XAG) Daily Forecast: Silver Poised for a Breakout—$30.20 Resistance in Focus

Market Overview

Silver (XAG/USD) has turned bearish, trading around $29.75 after hitting an intra-day low of $29.36. This downturn is largely due to the bearish trend in gold prices, as silver often mirrors gold’s movements.

Despite this pullback, the near-term outlook for silver remains positive, driven by expectations that the Federal Reserve may begin reducing interest rates at its September meeting.

According to the CME FedWatch tool, there’s a 28.5% chance of a 50-basis point rate cut, with most investors expecting a 25-basis point reduction. However, the strength of the U.S. Dollar continues to exert pressure on silver prices, offsetting the bullish sentiment generated by potential Fed easing.

Surge in Global Silver Demand and Indian Imports

Silver prices are experiencing a significant surge in 2024, largely driven by a dramatic rise in global demand. This increase is attributed to the booming solar industry, heightened investor interest, and a growing need for electronics, particularly in India.

India has become a major player in the global silver market, with imports nearly tripling in the first half of 2024. The country imported an astounding 4,554 tons of silver, up from just 560 tons during the same period last year.

This surge is primarily due to industrial buyers stockpiling silver for solar panel production and electronics manufacturing.

Additionally, the Silver Institute forecasts a 2% rise in global silver demand this year, reaching 1,219 tonnes. As the world’s largest silver consumer, India is expected to continue driving prices higher, particularly as its solar and electronics industries expand.

Kyrgyzstan, although a smaller player, has also seen a significant boost in exports, mainly to India and Switzerland. Exports from Kyrgyzstan have surged 90-fold compared to the previous year, with 95% going to India, further emphasizing the country’s crucial role in the global silver market.

Short-Term Forecast

Silver is trading near $29.75, with support at $29.70. A break below this level could push prices to $29.39, while a rise above $30.20 may target $30.50.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is currently consolidating between $29.75 and $30.20 on the 4-hour chart. The metal finds support around the $29.70 pivot point, bolstered by an upward trendline.

A break below this key support could lead to a decline toward the 50 EMA at $29.39 and the 200 EMA at $28.95.

Conversely, if demand increases and silver breaks above the $30.20 resistance, it could target higher levels at $30.50 and $30.80.

Traders should monitor the $29.70 level closely, as it will likely dictate the near-term direction—bullish above and bearish below.