Silver (XAG) Daily Forecast: Festive Demand Boosts Prices, But Resistance Looms at $34

Market Overview

Silver prices (XAG/USD) have gained mild traction around the $32.76 mark, reaching an intraday high of $32.82 on Friday. This recent increase is fueled by a surge in demand during India’s festive season, where silver purchases rose by an impressive 30-35% despite a 40% rise in prices.

However, this surge has not been enough to push silver above its previous high of $34, as a strong U.S. dollar and rising Treasury yields weigh on gains.

“The demand spike during Dhanteras shows a significant shift in consumer preference toward silver,” said a market analyst.

As gold prices soar, many Indian consumers are turning to silver as an affordable investment alternative. This trend is driven not only by affordability but also by silver’s increased use in industrial applications, particularly in electric vehicles (EVs), which further boosts demand.

U.S. Economic Data and Dollar Strength Pressure Silver Prices

Despite the seasonal demand, silver faces headwinds from U.S. economic indicators. The strong U.S. dollar, supported by rising Treasury yields, makes silver less attractive for international buyers.

The recent Personal Consumption Expenditures (PCE) Price Index, a key inflation measure, rose by 2.1% year-over-year in September, slightly down from August’s 2.2%. Core PCE, excluding food and energy, climbed 2.7%, surpassing the market estimate of 2.6%.

Additionally, Initial Jobless Claims for the week ending October 26 dropped to 216,000, beating expectations of 230,000 and signaling a robust labor market.

These factors support the likelihood of a 25-basis-point rate cut by the Federal Reserve in November, which could shift monetary policy to an accommodative stance. If the Fed lowers rates, it may weaken the dollar, potentially giving silver prices a boost.

Silver’s Investment Appeal Strengthens Amid Shifting Trends

With gold prices remaining high, silver is emerging as a popular investment option in India, particularly during the Dhanteras festival. The demand surge highlights a shift in consumer behavior as more people look to silver for affordability and investment potential.

This trend, combined with rising industrial demand, positions silver as a compelling investment.

In summary, while the strong U.S. dollar and rising yields currently cap silver’s gains, the upcoming Fed rate cut could create room for upward momentum, as investors seek alternative safe-haven assets.

Short-Term Forecast

Silver’s short-term outlook hinges on breaking the $33.28 resistance. A push above could target $33.52, but strong dollar and yields may limit gains. Support at $32.52.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $32.78, up 0.38% for the session. The price is nearing a critical resistance level at $33.28, with additional resistance at $33.52 and $33.76 if momentum builds.

However, with the 200-day EMA at $32.99, silver’s upside could be limited as this level also aligns with a 23.6% Fibonacci retracement.

On the downside, immediate support stands at $32.52, followed by deeper support levels at $32.17 and $31.79.

In short, silver is in a cautious uptrend, but a break above $34 would be needed to confirm a stronger bullish outlook. Until then, the metal may face some resistance around current levels.