Silver (XAG) Daily Forecast: Solar Demand Slows, Pushing Silver Prices Lower

Market Overview

Silver (XAG/USD) continued its downward momentum on Monday, holding around $31.20 as the metal hovers near a three-week low set last Wednesday. The price decline reflects a broader bearish trend from a recent 12-year high, largely driven by the strengthening U.S. dollar and waning demand for silver in key sectors.

The dollar’s resilience, supported by optimism around President-elect Donald Trump’s tax policy proposals, has made silver more expensive for international buyers, pushing prices lower.

“The strong dollar environment is making it difficult for silver to regain ground, especially with U.S. Treasury yields remaining high,” said a market analyst. Higher yields make safe-haven assets like silver less attractive, adding pressure to the metal’s price.

Solar Industry Slowdown Further Dampens Demand

An additional factor in silver’s recent dip has been a slowdown in demand from the solar industry, a critical sector for silver consumption. Seasonal changes as winter approaches typically reduce solar installations, impacting demand for silver in solar technology.

Many countries that import solar products have also cut back, further affecting silver’s price. With global silver demand dropping, traders are adopting a cautious approach ahead of key U.S. economic data releases this week.

Inflation, Producer Price Index (PPI), and retail sales data are anticipated, with potential impacts on the dollar’s strength and, consequently, silver prices.

Market Awaits Fed Insights Amid Rising Trade Tensions

As traders focus on Fed commentary, especially from Chair Jerome Powell, any hints on future rate cuts may influence silver’s outlook. While the Federal Reserve recently cut rates by 25 basis points, officials are maintaining a wait-and-see approach, requiring more concrete signs of inflation approaching the 2% target before making further adjustments.

Potentially complicating silver’s outlook, Trump’s trade policies could escalate global tensions, prompting investors to shift back to safe-haven assets like silver. While the strong dollar and high Treasury yields currently weigh on silver prices, increased geopolitical risks may bring renewed interest in the metal as a stable investment.

In summary, silver remains under pressure from a strong U.S. dollar and high yields, with further movement likely dependent on U.S. economic data and Fed guidance.

Short-Term Forecast

Silver holds near $31.35, with bullish potential above $31.21. Immediate resistance sits at $31.75, but a drop below $31.21 could prompt a sharper decline.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading slightly up at $31.35, showing a 0.15% gain. The key pivot point to watch is $31.21; holding above this level could sustain a bullish trend, with immediate resistance at $31.75 and further resistance at $32.16 and $32.48.

On the downside, support is at $30.89, with additional levels at $30.52 and $30.19. Currently, the 50-day EMA sits at $31.76, and the 200-day EMA is higher at $32.44, creating a resistance zone just above.

For now, the sentiment leans bullish above $31.21, but any dip below this level could signal a sharp downturn, so it’s a critical level for traders to monitor closely.