Silver price climbs 3% higher amid increased industrial demand
Geopolitical tensions drive silver’s bullish rally higher
Silver prices have surged recently, driven by a combination of geopolitical factors and strong industrial demand. The metal’s rally is not just a short-term move but part of a broader bullish trend, supported by key technical indicators. As such, the outlook for silver remains positive, with the potential for further gains if certain resistance levels are broken.
Geopolitical tensions, particularly around South Korea’s failed martial law declaration and the ongoing unrest in the Middle East, continue to drive heightened demand for silver as a safe-haven asset.
On Wednesday, silver saw a significant 3% jump, bouncing from the Fibonacci 0.5% support level around $30.50. This move coincided with the metal finding support at the trendline of its established bullish channel. The upward momentum continued as silver broke above both the 200 EMA and the Fibonacci 0.786 retracement level at $31.12. These levels now act as near-term support, reinforcing the view that silver could continue to rise in the near future.
Critical resistance ahead may stall silver outlook
On Thursday, a critical price zone ($31.50) looms just above the current price of 31.25. This level has been a strong resistance point for silver since November, and a sustained break above it would signal a long-term shift towards more bullish sentiment. Should silver manage to push past this barrier, the next target could be 32.40, especially if the technical indicators remain in the current bullish configuration.
Expectations of further stimulus measures from China are fueling further optimism. As the world’s second-largest economy seeks to bolster growth, silver, being a key industrial metal, stands to benefit from increased demand. This is especially true in sectors like renewable energy, where silver plays a pivotal role in technologies such as solar panels adding further bullish pressure to prices.
Silver prices face headwinds despite a potential interest rate cut by the US Federal Reserve. The precious metals have seen some safe-haven demand due to geopolitical events in South Korea.
