Silver (XAG) Daily Forecast: Analyzing Influences on Price Trends

Market Overview

Silver prices (XAG/USD) traded around $31.48 during early Asian hours on Monday, struggling to find stability amid a challenging global economic environment. The decline comes as risk sentiment strengthens across financial markets following China’s announcement of fresh stimulus measures aimed at bolstering its sluggish property sector.

Despite the downward pressure, silver has found some support from expectations of a significant U.S. interest rate cut. Current forecasts indicate a 54% probability of a half-point reduction in November, which could provide additional momentum for the metal as a hedge against currency weakness.

Surge in Indian Silver Demand

India’s silver demand has been a key factor in supporting prices this year. In just the first four months of 2024, imports reached 4,172 metric tons, surpassing the 3,625 metric tons imported during all of 2023. The surge is largely attributed to the nation’s expanding solar energy initiatives, which have boosted the production of solar cells and modules—key applications of silver.

India’s focus on domestic manufacturing to strengthen its supply chain and reduce dependency on imports from countries like China and Vietnam is also driving this demand. The increased consumption of silver in industrial applications provides a steady support base for the metal’s prices, counteracting fluctuations driven by global risk sentiment.

China's Stimulus and US Rate Cut Prospects

The People’s Bank of China’s (PBoC) recent decision to lower reserve requirements for banks is expected to inject liquidity into the market, easing domestic financial conditions. Combined with a dovish U.S. Federal Reserve outlook, these measures are likely to support silver prices in the near term.

Geopolitical uncertainties add an additional layer of complexity. While a more positive market sentiment could dampen safe-haven demand, heightened tensions in the Middle East might drive investors back to silver as a defensive play. Overall, the metal’s short-term trajectory remains heavily influenced by global economic policies and regional geopolitical developments, keeping investors on alert for any shifts that could alter its course.

Short-Term Forecast for Silver Prices

Silver (XAG/USD) hovers at $31.48, struggling to maintain momentum amid mixed global economic signals. Immediate support is at $31.39, with resistance at $31.70. Watch for a breakout above $31.70 to signal bullish momentum.

Technical Outlook for Silver

Silver (XAG/USD) is trading at $31.48, down 0.07%. The price is hovering below the pivot point at $31.70, indicating a bearish bias. Immediate support is at $31.39, followed by $31.11 and $30.75.

If the price drops below these levels, further selling pressure could take silver to the lower support zone. On the upside, breaking through $31.70 could push silver toward resistance at $31.89 and the next key levels at $32.21 and $32.47. The 50-day EMA at $31.75 is a crucial short-term barrier, while the 200-day EMA at $31.27 offers long-term support. Watch for a breakout above $31.70 to signal renewed bullish momentum.