Silver price rallies on bullish long-term fundamentals


  • Silver nears the top of a range as the bulls push prices higher. 
  • Long-term fundamentals support, including positive global growth and robust demand.  
  • US Industrial Production data beats to the upside suggesting increased demand by industry. 

Silver price (XAG/USD) pushes higher, trading up over one and a half percentage points in the $25.20s on Friday, on technical buying mainly – and long-term bullish fundamentals. 

The precious metal, which is used in industrial processes as well as to store value, sees gains after the release of US Industrial Production data beat estimates with a 0.1% rise in February when economists had expected flat growth. The data, released by the US Federal Reserve (Fed), was also an improvement on the negative 0.5% of the previous month. 

A positive outlook for global growth has led analysts such as Macquarie's Marcus Garvey to speculate Silver could be in for more gains as demand increases for its use in the manufacture of Solar Panels, a wide variety of electronic devices and jewelry. 

Recent higher-than-expected inflation data from the US has failed to dissuade Silver bulls, despite the data pointing to further delays before the Federal Reserve pushes the button on cutting interest-rates. Usually a higher interest rate outlook would be bearish for Silver in its role as an investment since it is non-yielding so loses out in a high inflation environment, however, this has not been the case this time. 

The Silver Institute, a not-for-profit organization based in the US, has forecast robust demand for Silver in 2024, predicting it will see its second best year on record with demand rising to 1.2 billion ounces. 

From a technical perspective, XAG/USD remains stuck in a range between $19.00 and $26.00 (thick lines), which itself sits within a broader range between $17.50 and $30.00. 

It is rallying in a short-term bullish uptrend within its ranges, and is now quite near the narrower range’s highs. A decisive break above $25.85 would probably indicate a breakout to the upside, further increasing bullish enthusiasm. 

Such a breakout would probably see Silver rally to between around $29.50, if using the 0.618 Fibonacci ratio of the range, or just shy of $32.00 if extrapolating the full height of the range higher. 

Silver versus US Dollars: Weekly chart

If the latter, then it will mean the pair has also broken out of the top of the broader range, indicating even greater upside, potentially to a target at $37.50. 

Alternatively the precious metal could meet tough resistance at the range highs in the $25.80-90s and pullback down. 

Traders should watch for a decisive break higher before jumping in. A “decisive” break  is one characterized by a long green daily candle piercing clearly above the level and closing near its high, or three green candles in a row, breaching the level.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD recovers toward 1.0850 as risk mood improves

EUR/USD recovers toward 1.0850 as risk mood improves

EUR/USD gains traction and rises toward 1.0850 on Friday. The improvement seen in risk mood makes it difficult for the US Dollar (USD) to preserve its strength and helps the pair erase a portion of its weekly losses. 

EUR/USD News

GBP/USD stabilizes above 1.2700 after downbeat UK Retail Sales-led dip

GBP/USD stabilizes above 1.2700 after downbeat UK Retail Sales-led dip

GBP/USD staged a rebound and stabilized above 1.2700 after dropping to a weekly low below 1.2680 in the early European session in response to the disappointing UK Retail Sales data. The USD struggles to find demand on upbeat risk mood and allows the pair to hold its ground. 

GBP/USD News

Gold rebounds to $2,340 area, stays deep in red for the week

Gold rebounds to $2,340 area, stays deep in red for the week

Gold fell nearly 4% in the previous two trading days and touched its weakest level in two weeks below $2,330 on Thursday. As US Treasury bond yields stabilize on Friday, XAU/USD stages a correction toward $2,340 but remains on track to post large weekly losses.

Gold News

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Kabosu, the popular Shiba Inu dog that inspired the logo of the largest meme coin by market capitalization, Dogecoin (DOGE), died early on Friday after losing her fight to leukemia and liver disease.

Read more

Week ahead – US PCE inflation and Eurozone CPI data enter the spotlight

Week ahead – US PCE inflation and Eurozone CPI data enter the spotlight

Dollar traders lock gaze on core PCE index. Eurozone CPIs in focus as June cut looms. Tokyo CPIs may complicate BoJ’s policy plans. Aussie awaits Australian CPIs and Chinese PMIs.

Read more

Forex MAJORS

Cryptocurrencies

Signatures