Silver price rises to $30.7 as rate cuts and tech demand drive momentum
Silver rebounds, eyeing $30.8 amid rate cut forecasts
Silver price is showing signs of resilience, bouncing back from an 11-week low of $29 to reach $30.7, challenging key resistance levels that could define its short-term trajectory.
But the real story lies beyond the charts, Federal Reserve rate cuts, a possible U.S. recession, and the rise of AI-powered industries paint an exciting picture for silver's future.
Silver price dynamics (November 2024). Source: TradingView
Historically, Federal Reserve rate cuts have acted as a springboard for silver prices. Although initial declines often follow rate cut announcements, silver has consistently posted substantial gains during rate-cutting cycles. For instance, past cycles have seen peak-to-trough gains averaging 332%, typically unfolding over one to two years. With analysts forecasting potential U.S. rate cuts in 2025, coupled with a likely economic recession in the year’s first half, silver may see another wave of upward momentum.
AI boom and economic stimulus to drive silver outlook
Silver also stands to benefit from its unique dual role as both a precious and industrial metal. In previous recessions, silver has outperformed gold, particularly as economies transition into recovery phases. Expected U.S. stimulus measures post-recession could significantly boost demand for silver-intensive industries like infrastructure and technology.
Additionally, artificial intelligence (AI) is poised to create a new era of silver demand. As an essential component of microchips, silver is critical to the tech boom, evidenced by the rise of companies like NVIDIA. The energy demands of AI also highlight silver’s role in solar energy, with silver-rich solar panels increasingly used to power data centers.
While technical indicators like the 50 and 100 EMA and Fibonacci's golden ratio at $30.8 still weigh on the metal, a breakout above these levels could solidify its recovery and support an extended uptrend. Beyond short-term price movements, silver's long-term outlook is bolstered by broader economic and technological trends.
Silver prices dropped to an 11-week low of $29.00 before rebounding. Rising U.S. inflation and technical indicators point to further downside risks for Silver.
