Silver (XAG) Daily Forecast: Price Struggles Below $32 Pivot—Will Bulls Push Higher?
NEW YORK (October 7) Silver prices (XAG/USD) hovered at $31.85 on Monday, despite a strong surge in demand, particularly from the solar energy sector.
The recent decline can be attributed to improved market sentiment. Investors are shifting focus away from safe-haven assets due to easing concerns over a U.S. economic slowdown and optimism around China’s stimulus efforts.
Supply Shortages Drive Market Deficit for Silver
Ongoing supply shortages are set to play a critical role in determining silver’s future trajectory.
According to the Silver Institute, global silver demand has outpaced supply for three consecutive years, with a projected deficit of 215 million ounces for 2024.
This imbalance is driven by increasing industrial consumption and limited new mine production. Despite the rise in prices—up from $13.30 per ounce in 2016 to over $31 today—production remains 62.8 million ounces below its peak in 2016.
Transition Metals Shortage Poses Broader Market Risks
The Bloomberg NEF report highlights that a broader shortage in key transition metals could further elevate silver prices.
The report estimates a $2.1 trillion investment is required by 2050 to secure a stable supply of raw materials necessary for clean energy technologies.
Without this investment, the costs of essential metals like aluminium, copper, and lithium could rise sharply by 2030.
Market Outlook: Potential for Higher Silver Prices
For now, the combination of rising demand and limited supply points to higher silver prices in the near future. As shortages deepen, competition for these limited resources may increase prices, especially if supply disruptions persist.
Staying attuned to these market developments will be crucial for investors and industries relying on silver. This will help them navigate potential price volatility and secure long-term supply stability.
Short-Term Forecast
Silver is likely to remain range-bound between $31.78 and $32.27. A breakout above $32.27 could target $32.47, while a drop below $31.78 risks further declines.
FXEmpire
