Silver (XAG) Daily Forecast: Supply Deficit of 182M Ounces Expected to Drive Prices Higher in 2024

Market Overview

A recent report by the Silver Institute highlights silver’s growing importance for institutional investors seeking stability and growth. The study, conducted by Capitalight Research Inc., emphasizes silver’s dual role as a tangible safe-haven asset and an essential component in industrial applications.

Unlike equities and bonds, silver’s low correlation with traditional assets provides diversification benefits, reducing portfolio risk.

The report also points to geopolitical instability and weakening fiscal positions as factors enhancing silver’s appeal. Historical data show silver’s reliability during economic and geopolitical crises, making it a valuable hedge against inflation and currency devaluation.

For institutional portfolios, silver offers both protection during market volatility and growth potential through industrial demand.

Industrial Demand Fuels Long-Term Growth

Silver is increasingly vital to green technologies, including solar panels, electric vehicles, and advanced electronics. The global shift toward renewable energy and electrification is driving a sustained rise in silver demand, contributing to a projected supply deficit of 182 million ounces in 2024.

This imbalance between rising demand and constrained supply could result in heightened price volatility, with significant upward pressure on silver prices.

Additionally, supply challenges, including limited mining output, make silver a strategically important resource for industrial and investment purposes.

Geopolitics and Fed Policy Add Volatility

Despite strong demand, silver faces near-term challenges from a stronger U.S. dollar, which raises costs for international buyers. Recent geopolitical developments, such as escalating tensions in Eastern Europe, have bolstered safe-haven demand.

At the same time, traders are closely monitoring Federal Reserve rate expectations, which could influence silver’s trajectory in the short term.

Short-Term Forecast

Silver’s short-term outlook remains bullish above $31.25, with key resistance at $31.53. A stronger U.S. dollar and geopolitical tensions add volatility to price movements.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $31.25, up 1.30%, supported by an upward channel on the 4-hour chart. The pivot point at $31.25 serves as a key level, with the bullish trend intact above this mark.

Immediate resistance lies at $31.53, with further targets at $31.83 and $32.15 if the momentum holds. On the downside, support sits at $30.83, with additional levels at $30.52 and $30.18.

The 50-day EMA at $30.98 provides a solid support base, while the 200-day EMA at $31.43 signals potential resistance if prices move higher. Silver remains bullish above $31.25, but a break below this level could reverse the trend and trigger a sharper selloff.