Silver (XAG) Forecast: Can Prices Break $34.35 and Target $35.40 Amid Bullish Sentiment?

Silver Attempts Breakout as Traders Eye Multi-Year Highs

Silver prices continued their uptrend on Tuesday, with traders attempting to break above the critical resistance level at $34.35, a 12-year high. Should this level be surpassed, the next target is $35.40, another multi-year peak. Despite the strong upward momentum, traders remain cautious, as a lower close could trigger profit-taking. However, with a bullish long-term outlook, any dips into support are expected to attract buyers.

At 11:35 GMT, XAG/USD is trading $34.39, up $0.60 or +1.78%.

Russian Central Bank to Acquire Silver Reserves

In a major development, the Russian central bank has announced plans to add silver to its reserves for the first time. This move is part of Russia’s broader strategy to diversify its precious metal holdings, which already include gold, platinum, and palladium. The addition of silver could create a new layer of demand, providing strong support for the metal in the coming months.

Historically, central banks have focused on gold, but Russia’s diversification into silver signals that the metal may be undervalued. Analysts believe silver’s industrial demand, particularly in photovoltaics and electronics, adds to its appeal. This development could spur prices higher, with some experts forecasting a 50% price increase over the next two years as central bank demand and industrial usage grow.

Gold Near Record Highs; Safe-Haven Demand Supports Silver

Gold’s recent surge to near-record highs has had a spillover effect on the silver market. Gold is hovering just below Monday’s record high of $2,740.00 as geopolitical tensions and global economic uncertainty drive demand for safe-haven assets. The metal’s uptrend, fueled by strong ETF inflows and rising central bank purchases, has indirectly boosted silver prices as well, given the correlation between the two precious metals.

While gold remains a preferred refuge for investors amid uncertainty surrounding U.S. elections and global tensions, silver is benefiting from the same sentiment. Silver often follows gold in times of heightened risk aversion, with investors turning to it as a more affordable alternative for wealth preservation.

Market Forecast: Bullish for Silver

The outlook for silver remains bullish in the near term, with prices pushing toward $35.40 and potential for further gains. The Russian central bank’s silver purchases, combined with industrial demand and gold’s strong performance, create a favorable environment for silver. Traders should be cautious of short-term pullbacks, but any dips are likely to attract buying interest, especially with central banks increasing their focus on precious metals.

As long as gold maintains its upward trend, silver will likely follow suit. Investors should keep an eye on key levels, with continued upside potential if the $34.35 resistance is convincingly broken.