Silver (XAG) Daily Forecast: US Dollar Recovers, China’s Demand Keeps Silver Prices Above $30

Market Overview

Silver (XAG/USD) continues to hover around $30.40, struggling to shake off its bearish trend as a strong US dollar weighs on the metal’s performance. Despite this downturn, China’s increasing demand for silver could offer a lifeline for prices.

Silver prices in China are currently about 10% higher than Western markets due to robust demand from industries such as solar panels and tech manufacturing.

Chinese silver imports surged to over 400 tons in both June and July, doubling the previous year’s average of 200 tons per month.

China’s Silver Demand and Supply Shortages

The rapid increase in China’s demand has sparked concerns about a potential “silver squeeze”, where supply might not meet the rising need, particularly in industries reliant on silver, like electronics and renewable energy.

Analysts warn that this imbalance between demand and supply could result in significant global price increases, particularly as silver plays a critical role in technological manufacturing and clean energy initiatives.

US Dollar Recovery and Geopolitical Tensions

Meanwhile, the US dollar has rebounded from its lowest level since July 2023, though it remains under pressure. Expectations of a 50 basis point rate cut by the Federal Reserve are keeping the dollar volatile, with markets estimating a 65% chance of such a move.

Stronger-than-expected US retail sales, which rose 0.1% in August, briefly boosted the dollar, further restraining silver prices.

Despite the dollar’s recovery, geopolitical risks—ranging from rising tensions in the Middle East to North Korean missile tests—continue to fuel investor uncertainty.

These factors could eventually lead to a safe-haven rally for silver, as investors seek security amid global instability.

Short-Term Forecast

Silver hovers around $30.40, with bearish momentum likely to persist below $30.50. Watch for potential support near $30.12, but rising Chinese demand could spark a rebound.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $30.40, down 0.89%, showing signs of weakness after forming a bearish engulfing candle on the 4-hour chart. This pattern signals potential for further downside movement, especially if prices remain below the key pivot point at $30.50.

Immediate support is at $30.12, with the next levels at $29.82 and $29.53, which could come into play if the bearish momentum strengthens. The 50-day EMA at $29.79 and the 200-day EMA at $29.14 are both trending upward, but currently signal a bearish bias.

On the upside, Silver would need to break above the $30.80 resistance level to reestablish a bullish outlook. Silver remains bearish below $30.50. A break above this level could reignite bullish momentum, but for now, downside risks persist.