Silver (XAG) Forecast: Silver Firms as Key Support at $29.87 Holds Strong

Silver Pushes Higher as Key Support Holds, Eyes on Breakout Levels

Silver prices are edging higher on Tuesday, following a successful defense of the 200-day moving average at $29.87. This level is proving to be a critical support zone. If it fails, prices could slide toward the next support at $29.54.

A sustained move above the 200-day moving average signals the presence of buyers, with $30.54 emerging as the next upside target. Overcoming this pivot would open the path toward the 50-day moving average at $30.86. Sellers are expected to step in at this level on the first test, but a clear break could drive prices higher, with $32.33 as the next major resistance.

At 12:00 GMT, XAG/USD is trading $30.23, up $0.28 or +0.94%.

Gold’s Strength Provides Tailwind for Silver

Gold prices are also advancing, driven by a weakening U.S. dollar, providing indirect support for silver. Gold remains below its 50-day moving average at $2653.94, with this level acting as a formidable resistance. A break above could trigger further upside, targeting the retracement zone between $2663.51 and $2693.40.

On the downside, key support for gold lies between $2629.13 and $2607.35, a range that has held firmly in recent sessions. The dollar’s softening, fueled by uncertainty surrounding U.S. tariff policies under President-elect Donald Trump, continues to underpin gold and, by extension, silver.

Industrial and Solar Demand Drives Silver’s Appeal

Silver’s role as an industrial metal is bolstering demand, particularly as solar panel production ramps up globally. The transition to renewable energy is driving silver’s use in photovoltaic cells, reinforcing price support alongside its traditional status as a precious metal.

Additionally, manufacturing activity and electronics sectors are contributing to silver’s bullish outlook. As industrial demand strengthens, silver’s price is expected to track higher alongside gold, benefiting from dual demand streams.

China’s Gold Buying Signals Broader Market Strength

China’s ongoing accumulation of gold, with reserves at 73.29 million troy ounces by the end of December, underscores continued demand for precious metals. Analysts suggest this trend may also reflect broader interest in silver, given their complementary roles in investment portfolios.

Market participants view China’s persistent buying as a stabilizing factor for precious metals, reinforcing expectations of steady price floors and potential upward pressure.

Silver Market Outlook

Silver’s immediate outlook hinges on its ability to hold above the 200-day moving average. A breakout above $30.54 could catalyze a test of $30.86, with potential for acceleration toward $32.33 if momentum builds.

While short-term pressures persist, industrial demand and gold’s resilience are expected to keep silver supported. Traders will watch for economic data and dollar movement as key drivers, with silver positioned to benefit from broader precious metal trends in the near term.

More Information in our Economic Calendar.