Silver (XAG/USD) Outlook Amid Military Demand and Seasonal Buying

Market Overview

Silver prices (XAG/USD) have risen for the sixth consecutive day, reaching $34.20 per troy ounce on Tuesday. This continued rally is largely driven by global uncertainties, including market concerns ahead of the U.S. presidential election and the rising military demand for silver.

Analysts also point to expectations of increased demand in China, supported by recent economic stimulus measures, as an additional factor boosting silver’s appeal. “The silver market has been responding to both geopolitical risks and shifting monetary policies,” said a senior market strategist. The metal’s non-yielding nature makes it attractive during periods of monetary easing, as central banks like the Bank of Canada are anticipated to cut interest rates further, including a potential 50-basis-point cut this week.

Hidden Military Demand Driving Silver’s Strategic Importance

A less-discussed but increasingly relevant factor influencing silver prices is the military’s covert demand for the metal. Silver’s use in electronics, advanced weaponry, and medical equipment makes it critical in defense industries. Recent studies suggest that military demand for silver may now outpace that of traditional sectors like electronics and renewable energy.

Historically, military demand has remained largely underreported. U.S. government data on silver inventories has not been publicly shared since the mid-1990s. This hidden demand could create supply constraints, with global supply chains already strained by rising industrial applications.

Global and Seasonal Factors Boosting Silver’s Outlook

In addition to military and geopolitical factors, the upcoming festive season in India has fueled silver purchases by local jewelers, further driving up prices. With improving demand in China and the U.S. election adding volatility to global markets, silver remains an attractive investment for those seeking protection against economic uncertainty.

Investors are now closely watching the next monetary policy moves and potential supply shortages, which could push silver prices even higher.

Short-Term Forecast

Silver prices are likely to remain bullish as long as they hold above $33.52. A break above $34.21 could signal further gains, while a drop below may trigger selling.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $34.13, up 1.01%, as it continues to ride the momentum within an upward channel. The immediate pivot point at $33.52 is key—staying above this level supports a bullish outlook, with resistance at $34.21 and $34.69 in sight.

However, a double top pattern around $34.20 could limit further gains. Support levels are found at $33.11, with additional downside protection at $32.75 and $32.40. The 50-day EMA at $32.89 offers dynamic support, reinforcing the bullish trend. Watch for a break below $33.52, which could signal a sharp reversal in the short term. For now, the bias remains upward.