Silver (XAG) Forecast: Price Surge Heads Towards $34.35 and $35.40

Silver Prices on the Verge of Breakout

Silver prices are attempting to breach the pivotal resistance level of $34.35, a critical point marked as a 12-year high. Should this resistance be overcome, the next target appears to be $35.40, indicating strong bullish sentiment. While the momentum is promising, traders are urged to remain cautious as a close below resistance might trigger profit-taking.

Daily Silver (XAG/USD) Performance

As of 11:35 GMT, silver is trading at $34.39, reflecting an increase of $0.60 or +1.78%. Traders are closely monitoring the situation as market dynamics shift.

Strategic Move by the Russian Central Bank

In a significant move, the Russian central bank has announced plans to incorporate silver into its reserves for the first time. This strategy is part of its broader objective to diversify its precious metal holdings, which already include gold, platinum, and palladium. This addition could spike demand, presenting stronger support for silver prices in the long run.

Implications for Price Movements

Central banks have conventionally favored gold, but Russia's interest in silver suggests potential undervaluation of the metal. Analysts predict that increasing industrial demand, particularly in the photovoltaics and electronics sectors, may strengthen silver's market position. With projections of a possible 50% price increase over the next two years driven by growing central bank and industrial needs, the outlook remains favorable.

Gold's Influence on Silver Market

Gold's ascendancy toward record highs influences silver valuations, with gold experiencing demand due to geopolitical tensions and economic uncertainty. As the safe-haven demand escalates, so too does silver's value, as it serves as an economical alternative to gold during times of crisis. The correlation between these two precious metals suggests that silver prices will likely follow gold's trajectory.

Market Sentiment and Forecast

The immediate outlook for silver is optimistic, with expectations for prices to challenge $35.40 amidst robust market dynamics. The combination of the Russian central bank's silver purchases and high industrial demand propels optimism. Traders should remain alert to potential short-term retracements, though these are expected to attract buying interest. Continued vigilance on gold's performance is crucial, as its upward trend will likely support silver prices.