Silver prices surge over 3% in early 2025 due to geopolitical demand
What's happening to the silver price
Following a double bottom pattern in December 2024, Silver has made a notable start to 2025, gaining momentum of over 3% between January 1st and 2nd. After this sharp rally, the precious metal now faces key resistance levels, with the 29.65 price point proving to be a significant hurdle. However, recent movements suggest silver may be on the verge of a breakout, as it continues to push towards new highs.
The first trading day of the year saw silver soar to a three-day high, a rally not witnessed in the last five days of trading. This upward shift comes after a double bottom in December, setting a strong foundation for a potentially bullish 2025.
Silver price dynamics (November 2024-January 2025). Source: TradingView
The upward momentum in silver aligns with the safe-haven demand due to recent geopolitical tensions. As geopolitical unrest continues, such as the ongoing Russia-Ukraine conflict and tensions in the Middle East, investor demand for precious metals has surged. The rise of the US Dollar Index (DXY) to a fresh three-year high of 109.250 also signals heightened market uncertainty.
Silver price outlook: On the verge of a breakout above critical resistanceCurrently, silver is testing its resistance at 29.65, a level that has capped its gains so far. However, today’s price action on January 3rd indicates the metal is attempting a clear breakout, with key focus on the 100-period Exponential Moving Average (EMA) on the 4-hour chart, which sits just above at 29.90. If silver manages to surpass both the 29.65 resistance and the 100 EMA, it could open the door to a stronger rally towards higher price levels.
Silver’s early bullish momentum into 2025, coupled with a potential breakout above 29.65 resistance and the 100 EMA could lead to further gains in the coming weeks. However, the path to sustained upward movement will hinge on the broader economic landscape, including US Dollar performance and developments in geopolitical tensions.
Silver rose by an impressive 21% in 2024, peaking at $35 per troy ounce in October. The Relative Strength Index (RSI) on the hourly chart is now in overbought territory.
