Silver poised for midterm rally as $33.77 base break ignites surge toward $40.00

With industrial demand reviving and Fed policy uncertainty easing, silver’s breach of its two-month range at $33.77 clears the path for a push through $36.65 and ultimately $40.00.

Technical outlook

• Breakout confirmation: After two months of sideways trading between $32.12 and $33.77, June saw silver decisively clear the $33.77 cap. Today it sits just above the $36.00 pivot—near the mid-point of its new $35.44–$36.65 range.

• Key support & resistance:

  • Support: $35.44 zone aligns with February–March 2025 supply-turned-demand, offering a potential re-entry on dips below $36.00.

  • Immediate resistance: $36.65 (channel midpoint), then $37.10 – $38.30 (upper boundary of its next price band).

• Midterm targets:

  1. $36.65 – holds above here to confirm momentum

  2. $37.10, $37.67 – steered by the upper regression channel trendline

  3. $38.30 – critical test for continuation toward $40.00

  4. $39.35, $39.97, $40.45 – stretch targets en route to the $40.00 mark

Fundamental drivers

1. Industrial demand rebound: Silver’s dual role—precious and industrial metal—benefits from ramped-up manufacturing of solar panels, EVs, and 5G infrastructure, with global industrial off­take rising 8% year-on-year.

2. Monetary policy uncertainty: Signs of a less hawkish Fed (slowing pace of rate hikes and dovish commentary in May FOMC minutes) have eased pressure on real yields, improving silver’s appeal as an inflation hedge.

3. Inflation & safe-haven flows: U.S. CPI running above 3% and lingering geopolitical tensions continue to drive investor interest into precious metals.

4. Central bank & ETF buying: Net purchases by central banks and continued silver ETF inflows (up 12% YTD) underscore strong institutional accumulation.

5. Chinese demand: Healthy silver imports into China—up over 20% in Q2—signal robust physical consumption from the world’s largest industrial metals consumer.

Trading strategy and risk management

• Bullish setup:

  • Enter partial long on a sustained hold above $36.65, with stops below $35.44.

  • Scale into additional positions on a break above $37.10, targeting $38.30 then $40.00.

• Watch for pullbacks:

  • A drop below $35.44 would negate the midterm bullish thesis and expose $34.35 and $32.12.

• Risk factors:

  • A sudden Fed hawkish pivot or risk-off shock could push real yields higher, weighing on silver.

  • Slower-than-expected industrial demand or a Chinese policy slowdown may dent momentum.

(This analysis is for informational and educational purposes only and does not constitute financial advice. Always conduct your own due diligence before trading).