Silver price remains steady near $30.55 despite strong resistance
Silver rises 3%, hitting a five-week high
Silver's price (XAG/USD) has recently held steady following three consecutive days of gains, maintaining a price near $30.55 per troy ounce during the European session on Friday, January 17.
Despite this positive momentum, the precious metal faces a broader bearish trendline that presents challenges to its long-term ascent. As investors weigh technical resistance and economic fundamentals, the outlook for silver remains shaped by both market forces and key data.
The strength of silver’s price has been partly driven by industrial demand, with positive economic reports from China acting as a catalyst. In December, China’s industrial production grew by 6.2% year-over-year, surpassing market expectations and marking the fastest growth since April. These figures suggest continued industrial demand for metals like silver, particularly in China, the world's largest consumer of silver. Silver’s price has also been supported by expectations that the US Federal Reserve may ease monetary policy in 2025. The Fed’s dovish stance gained traction after the release of weaker-than-expected US Retail Sales data for December. The disappointing figure contributed to market expectations that the Fed may lower interest rates, which historically tends to benefit non-yielding assets like silver.
Silver price dynamics (October 2024-January 2025). Source: TradingView.
Silver price forecast: Rally faces resistance amid broader bearish trend
Despite these factors supporting silver, the broader bearish trendline continues to challenge its price ascent. Silver’s recent rally was capped at $31.00 per troy ounce, near the Fibonacci golden ratio, which historically serves as a critical resistance level. The third consecutive day of gains on January 16 saw silver’s price rise toward this level, only to face a sharp decline of nearly 1% during the Asian session on January 17, bringing the price closer to $30.55.
The rise in industrial demand, coupled with a potentially more dovish Fed, supports the metal’s price outlook in the medium term. Furthermore, while the Relative Strength Index (RSI) which dropped from overbought conditions remains in bullish territory, indicating that the price may still have room to climb in the short term. However, until the broader bearish trendline is broken, silver’s price will likely remain contained or will trigger a deeper correction.
Silver prices hit a five-week high as speculation about Federal Reserve policy shifts. The metal rose over 3% on Wednesday, surpassing its 100-day EMA and the 50% Fib level.
