Exchange traded fund (ETF) inflows, while not dramatic, supported the price movement. Meanwhile, demand from Asia remains weak as buyers remain reluctant. Technical indicators point to silver's next resistance levels at $31.76 and $32.52, and if momentum continues, it could rise towards $35.00.
Geopolitical risks and a weak dollar continue to drive gains
Geopolitical tensions, including the escalating conflicts in Gaza and Ukraine, continue to boost silver's appeal as a safe haven asset. Hezbollah's involvement in the Middle East crisis raises the risk of broader regional instability, further supporting the precious metal. Additionally, the weakening of the US dollar has been a major contributing factor, making silver more attractive to investors holding other currencies.
The broader macroeconomic environment has also been a boon: falling Treasury yields and a dovish Fed stance have spurred investment in silver, which has risen more than 32% so far this year and outperformed other commodities.
Weekly Forecast: Silver Aims for $35 as Interest Rate Cuts Loom
With silver firmly entrenched in an uptrend, traders will be watching to see if further rate cuts and economic data will drive the next upside. Weak US economic data, including the latest retail sales and jobless claims numbers, suggest that further easing may be on the way. This could strengthen the outlook for silver and push it above the $32.52 resistance level towards $33.00 and possibly even $35.00.
However, headwinds such as weakening retail demand in Asia and a possible decline in industrial demand in China could dampen the upside. In the short term, safe-haven demand for silver and a dovish Fed stance will likely keep the rally going. Expect volatile but upward price action as traders try to take advantage of the dips.
