Silver Forecast: Analyzing the Impact of India's Solar Demand

Market Overview

Silver (XAG/USD) has continued its downward trajectory, trading around $31.64. This fall can be linked to a modest rise in the US dollar, paired with a broader risk-on sentiment in global markets.

India's Solar Boom Driving Silver Demand Higher

India's booming solar cell industry significantly drives silver demand, importing over 4,172 metric tons in the first four months of 2024. Leading companies like Tata Power and Reliance Industries' expanding solar manufacturing capacities are pushing prices higher, given silver's crucial role in solar technology.

Continued Price Pressure

Analysts anticipate upward pressure on silver prices due to these trends, yet caution over volatility and supply constraints remains.

China's Stimulus Boosts Silver

China's recent stimulus measures have positively impacted silver pricing, with expectations that silver could outperform gold. However, weakening industrial demand in China could limit silver's potential gains.

Short-Term Forecast

Currently, silver remains under pressure at $31.64. Failure to break above resistance at $31.89 suggests downside risks, with immediate support at $31.43.

Technical Outlook

Silver (XAG/USD) trades at $31.64, with technical indicators showing bearish sentiment. Observation of support and resistance levels will be crucial for future direction.