Silver price climbed down from Tuesday’s 12-year highs on Wednesday, but hovered around the psychological round figure mark of $34.50 per ounce. The gray metal traded at $34.50 at the time of writing, up by 1 percent on the daily chart. US presidential elections have weighed in on the demand for precious metals, as uncertainty persists on who will take over the reins at the White House.
Industrial demand for silver is expected to rise by 7 percent this year, and that figure could be higher if military consumption is included. On the other hand, the amount of silver leaving mines has contracted in the last four years. That signals potential shortages in the medium term, which augurs well for silver prices. In addition, the impact could start becoming apparent in the futures market towards the end of the year.
The immediate propulsion for silver price will likely come from next month’s Fed interest rate decision. FOMC members are expected to vote for a 25 bps cut, which could add downward pressure to US treasury yields. That favours the prices of non-yielding assets like gold and silver. Also, the rising war rhetoric in the Middle East brings safe haven support for silver prices, and will continue providing tailwinds as long as Israel, Iran and Hezbollah maintain hard stances.
The momentum on silver price favours the sellers if resistance persists at 34.52. That will likely establish the first support at 34.28. If the downward momentum strengthens, it could break below the first support and potentially test 34.03.
On the other hand, moving above 34.52 will favour the buyers to take control. In that case, the momentum could push the price higher to encounter the first resistance at 34.74. However, if the momentum strengthens further, the price could move above that mark to invalidate the downside narrative and test 35.00.
This post was last modified on Oct 23, 2024, 14:02 BST 14:02