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Silver (XAG) Forecast: Bulls Eye $30.98 Breakout as Momentum Builds

By:
James Hyerczyk
Published: Jan 24, 2025, 13:05 GMT+00:00

Key Points:

  • Silver trades above $30.40, surpassing key moving averages and targeting $31.81-$32.33 if $30.98 resistance breaks.
  • Key technical support levels for silver include $30.06 (200-day moving average) and $30.53 (pivotal breakout zone).
  • Dollar weakness and dovish Fed expectations drive silver’s bullish outlook, increasing global buying interest.
  • Gold's surge toward $2,790 reinforces silver’s rally, with both metals benefiting from economic uncertainty.
  • China’s tariff reductions may boost industrial demand for silver, supporting prices through stronger manufacturing.
Silver Prices Forecast

In this article:

Silver on the Move: Can Bulls Push Past Key Resistance?

Silver prices are signaling a bullish trend, with the metal currently trading above its key moving averages. At $30.40, silver is positioned well above its 50-day moving average, while the 200-day moving average at $30.06 offers additional support. Traders have also noted silver’s bullish move above the pivotal $30.53 level, adding to buying momentum.

The next critical resistance lies at last week’s high of $30.98. A breakout above this level could trigger an accelerated rally, targeting $31.81 to $32.33. Chart patterns suggest that the path of least resistance is upward, with silver poised for further gains if buying volume sustains.

At 12:57 GMT, XAG/USD is trading $30.90, up $0.46 or +1.50%.

Will China’s Policies Drive Industrial Demand for Silver?

China’s influence on the silver market continues to grow, particularly given its status as a leading industrial consumer of the metal. Reports of potential tariff reductions could bolster the Chinese economy, spurring demand for industrial metals like silver. A more accommodative trade environment would likely support manufacturing and infrastructure expansion, key sectors that rely on silver for electronics and solar panel production.

This aligns with broader market expectations for industrial demand to rebound if China accelerates its economic activity. Traders are keeping a close eye on developments in Beijing, as any significant policy changes could ripple through silver markets globally.

Gold’s Rally: A Bellwether for Silver Prices?

Daily Gold (XAU/USD)

Gold’s recent surge toward its all-time high of $2,790.17 is another factor supporting silver prices. Gold’s strength, driven by a weaker U.S. dollar and falling Treasury yields, often translates into gains for silver as traders seek opportunities in correlated markets.

The dollar’s one-month low, coupled with expectations for a dovish Federal Reserve stance, has bolstered precious metals. Spot gold’s fourth consecutive weekly gain underscores the broader appeal of safe-haven assets amid ongoing economic uncertainty.

How Does Dollar Weakness Impact Silver?

The U.S. dollar’s slide is creating tailwinds for silver. A weaker dollar makes silver more affordable for international buyers, driving additional demand. The pressure on the greenback stems from dovish Federal Reserve expectations and soft comments on tariffs from President Trump.

This dollar weakness, combined with declining Treasury yields, is likely to sustain momentum for silver, particularly as traders assess inflationary risks and broader market uncertainty.

Market Forecast: Upside Remains Likely

Silver’s bullish technical setup and supportive macroeconomic factors point to continued strength. If prices break above $30.98 with strong volume, the rally could extend toward $32.33. Traders should monitor gold’s movements, Chinese trade policy, and the dollar for additional clues, but the near-term outlook for silver remains positive.

More Information in our Economic Calendar.

About the Author

James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.

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