Silver (XAG) Daily Forecast: Ascending Trendline Support – Poised for an Uptrend?

Market Overview

Silver (XAG/USD) gained momentum during the Asian session on Tuesday, climbing to $31.34, marking a 0.90% increase for the day. This upswing broke a two-day losing streak as investors turned to safe-haven assets amid rising geopolitical tensions.

Expectations of a slowdown in U.S. inflation, which could lead the Federal Reserve to maintain its dovish stance on interest rates, also supported silver’s rally. Additionally, renewed optimism surrounding China’s economic stimulus measures boosted physical demand for the metal.

“Silver’s strength is being driven by a combination of safe-haven demand and favorable macroeconomic trends,” noted a commodities analyst at UBS.

Rising Demand and Strong Performance

Investor interest in silver has been bolstered by its performance relative to gold, as well as its increasing role in renewable energy technologies. Demand for silver in solar panel production is expected to rise by 20% this year.

Analysts predict that China will exceed its forecast for solar panel installations in 2024, further enhancing silver’s appeal.

“If silver can maintain prices above $32 per ounce, we could see further upside,” analysts suggest.

Last week, silver touched an 11-year high of $32.71 before pulling back, but continued strength could lead to additional gains as demand for renewable energy grows.

Impact of China’s Stimulus on Silver and Gold

While silver benefits from China’s economic measures, these policies have led investors to shift away from traditional safe-haven assets like gold, resulting in weaker gold demand. However, geopolitical uncertainty could still spur short-term volatility in precious metals.

With key U.S. economic data, such as the ISM Manufacturing PMI report, scheduled for release this week, silver’s immediate direction will hinge on whether the Federal Reserve signals any changes in its policy outlook.

If inflation remains subdued, silver may extend its recent gains, pushing it past the $32 resistance level.

Short-Term Forecast

Silver remains bullish above $31.08 support, with a key resistance at $31.40. A break above this level could push prices toward $31.62 and beyond.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $31.34, up 0.61% for the day, maintaining a bullish bias after bouncing off the $31.08 support level. The price is approaching the pivot point at $31.40, which may act as a short-term barrier.

If silver breaks above this level, it could test the immediate resistance at $31.62, with further upside potential toward $31.86 and $32.18. The 50-day Exponential Moving Average (EMA) at $31.52 will be a critical resistance to watch, as it aligns with a key retracement level.

On the downside, if silver drops below $31.08, it could signal a reversal, targeting the next support at $30.88. Overall, the trend remains cautiously bullish, but it needs to clear $31.40 for a stronger upward move.