Silver price forecast: Economic stimulus and U.S. CPI boost price outlook
Silver rallies near $32.30 on strong demand and Fed outlook
Silver prices have maintained a steady bullish trend since late November, supported by a combination of strong industrial demand, dovish expectations for the Federal Reserve's upcoming policy decisions, and the ongoing global economic landscape.
The metal has recently surged as traders reacted to the latest US Consumer Price Index (CPI) report, which showed that inflationary pressures were in line with expectations, leading to increased bets on a more dovish Federal Reserve stance for the December 18 meeting. This dovish outlook, along with rising industrial demand, has paved the way for a price outlook where silver could continue to build on its recent gains.
Silver prices recently hit a three-day high, coming within reach of the November peak of $32.30. As of the latest trading sessions in the Asian and European markets, silver remains just shy of that level, which is crucial for further upside momentum. The Relative Strength Index (RSI) currently sits at 60, signaling that silver is still in a healthy bull market without being overbought—an encouraging sign for those monitoring price levels. Should the price manage to break through the near-term resistance of $32.80, silver would be on track to surpass its November highs.
Silver price dynamics (November-December 2024). Source: TradingView.
Silver price prediction: $32.80 resistance key to future price movement
Traders are now keeping a close eye on China's economic stimulus measures, as the country’s Politburo discusses potential plans to revive domestic consumption and stabilize the real estate sector. Should these measures come to fruition, they would likely increase industrial demand for silver, further supporting price growth.
In the near term, silver prices face a support level at $31.50, near the 200-day exponential moving average (EMA), while resistance remains at $32.80. Should silver clear this resistance, it would pave the way for further price appreciation, potentially leading to fresh highs. All these factors make silver well-positioned to benefit from both industrial demand and macroeconomic forces.
Silver's price has gained more than 7% since the December low. Given the critical resistance level of $31.50 broken earlier this week, silver now appears poised to make further strides.
