SILVER Analysis
Afternoon: Silver Surges Above $32.50 Amid Trade Uncertainty & Strong Industrial Demand
Highlights:
- Silver extends rally above $32.50 amid global trade tensions and industrial demand growth.
- China’s renewable energy expansion boosts long-term silver consumption outlook.
- Technical support at $32.00 suggests potential for further bullish momentum.
Overview:
Silver prices climbed above $32.50 per ounce, reaching new three-month highs, as escalating global trade tensions and robust industrial demand fueled investor interest in the metal. Safe-haven demand for silver strengthened after US President Donald Trump announced plans to impose reciprocal tariffs on countries that charge duties on US exports, increasing fears of a broader trade war. The uncertainty surrounding these tariffs has led investors to seek protection in precious metals, further boosting silver’s appeal.
Additionally, market participants are closely monitoring US-led efforts to resolve the Ukraine conflict, as any progress in stabilizing the region may reduce safe-haven flows into silver and gold. However, the metal remains well-supported by strong industrial demand, particularly from the renewable energy and electrification sectors. China’s plan to add 357 gigawatts of solar and wind power by 2024 is expected to significantly drive industrial silver consumption, as silver is a key component in photovoltaic (PV) cells used in solar panels.
Macroeconomic Drivers
- Trade War Risks: Trump’s tariff threats could escalate global trade disputes, leading to economic uncertainty and higher silver demand.
- Geopolitical Developments: Any resolution in the Ukraine conflict may slightly limit silver’s safe-haven appeal.
- Industrial Demand Growth: Expansion in renewable energy projects, particularly in China, is set to increase silver usage in solar technology.
Technical Analysis & Key Levels
- Support Levels: Silver prices are expected to find support at $32.00 per ounce, while MCX silver is supported at ₹95,500.
- Resistance Levels: Resistance is seen at $33.20 per ounce, with MCX silver resistance at ₹98,200.
- Trade Strategy: Buy on dips around $32.75, targeting $33.15, with a stop loss below $32.00.
Key Economic Data to Watch
- Euro Zone: Current Account, EU Economic Forecasts
- US Zone: Building Permits, Housing Starts
Support and Resistance Levels:
