Silver (XAG) Forecast: China’s Stimulus Lifts Outlook – Will Prices Break 200-Day MA?

Silver Prices Rebound as Traders Defend Key Support Levels

Silver is trading higher this Thursday, with prices rallying in a counter-trend move as traders defend the critical support zone between $28.40 and $26.87. The bullish defense comes after recent downward pressure tested these key levels, signaling strong buying interest at lower price ranges.

At 12:17 GMT, XAG/USD is trading $29.41, up $0.51 or +1.77%.

China’s Economic Policies Support Silver Demand Outlook

China’s latest economic announcements could provide significant support to silver prices in 2025. President Xi Jinping’s recent pledge for proactive economic policies next year underscores Beijing’s intention to drive growth through increased stimulus and government spending. In his New Year address, Xi projected that China’s 2024 GDP would surpass 130 trillion yuan ($17.8 trillion), with a 5% growth target met for the year.

To counteract a sluggish economic revival marked by property market weakness and rising local government debt, Chinese authorities have already rolled out broad stimulus measures. These include rate cuts and relaxed property-buying regulations aimed at boosting domestic demand. Further easing measures, including an “appropriately loose” monetary policy in 2025—the first such move in over a decade—are expected to bolster industrial activity, supporting silver consumption across sectors such as electronics and renewable energy.

Geopolitical Risks Add Volatility to Silver Markets

While China’s growth policies present a bullish case for silver, potential geopolitical headwinds could introduce volatility. President-elect Donald Trump’s upcoming inauguration raises the risk of higher U.S. tariffs on Chinese exports, potentially dampening one of China’s most vital economic engines. However, Xi’s commitment to strengthening domestic markets and promoting high-quality development could mitigate some external pressures.

Short-Term Market Forecast

Silver’s ability to hold above $28.40 will be critical for determining near-term price direction. If prices stay above this key support, further gains toward $30.50 and beyond could materialize, with bullish momentum gaining traction from increased Chinese demand and broader market optimism. A breakdown below $28.40, however, could open the door for a retest of the $26.87 value area.

Traders will closely monitor Beijing’s next policy steps and global tariff developments for additional cues.

More Information in our Economic Calendar.