Silver (XAG) Daily Forecast: Will Surging Industrial Demand Push Silver Above $29.10?

Market Overview

Silver (XAG/USD) extended its rally on Thursday, trading around $28.78 during the Asian session. The metal’s ongoing strength is largely attributed to surging global demand, particularly for industrial applications.

Industrial consumption of silver now accounts for 64% of global usage, a sharp rise from last year’s 50%, marking a 19% increase. Mining companies such as Yukon Metals and First Majestic have reported strong performance, fueling the rally.

Growing Industrial Demand and Supply Constraints Drive Prices

The rising demand for silver is straining global supply, creating challenges for industries reliant on the metal. According to experts from Sprott Money and Investopedia, monitoring the gold-silver ratio will be crucial, with expectations of a breakout in silver prices later this year.

The Silver Institute forecasts that industrial demand will drive 58.3% of global silver consumption, or roughly 1.2 billion ounces in 2024. Mining companies are also ramping up operations. Yukon Metals recently reported strong silver assay results from its Star River Project, while First Majestic Silver is enhancing its production through a merger with Gatos Silver.

Although Pan American Silver reported a slight dip in output due to operational challenges, they expect an uptick in production later this year. Silvercorp Metals has also updated its resources, noting a 15% increase in silver reserves, particularly at its Gaocheng Mine.

Interest Rate Cuts from ECB and Fed Could Further Boost Silver

Silver’s status as a non-yielding asset is becoming more attractive amid speculation of interest rate cuts by major central banks. The European Central Bank (ECB) is expected to reduce rates by 25 basis points to 4.0% at its upcoming meeting.

Meanwhile, U.S. inflation data showed the Consumer Price Index (CPI) dropping to a three-year low of 2.5% in August, increasing the likelihood of a similar rate cut from the Federal Reserve.

Investors are now keenly awaiting U.S. Producer Price Index (PPI) data and Initial Jobless Claims reports for further clues on the Fed’s next move.

Short-Term Forecast

Silver (XAG/USD) holds above $28.07, with resistance at $28.54. A break above could push prices toward $29.12; failure risks a move to $27.71.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $28.17, up 0.21% in today’s session, showing steady upward momentum. The price is currently holding above immediate support at $28.07, but faces a critical resistance level at $28.54, which aligns with the 50-day Exponential Moving Average (EMA).

If silver can break above this level, it could move towards $29.12 and potentially target $30.12 in the near term.

However, if it fails to hold above $28.50, it could trigger a sharp selling trend, with next support levels at $27.71 and $27.29. Technical indicators suggest caution, with the 50-day and 200-day EMAs close, reflecting a market at a critical decision point.