- Summary:
- Silver price has been on a three-day winning streak and the current market fundamentals call for extended gains in the foreseeable future.
Silver price rose for the third successive session on Wednesday, mirroring its cousin gold’s trajectory as appetite grows for safe haven assets. The metal hit three-month highs of $32.47 during the European session, with a risk-off sentiment ruling the market amid rising tensions over a potential global trade tariff war.
Gold price rose to all-time highs of $2,865 on Wednesday, a day after 10% US trade tariffs against China took effect. The sentiment has seeped into the silver market. Also, US President Donald Trump’s assertion that he was in “no hurry” to start negotiations with China added downward pressure on equities markets. Furthermore, Trump added geopolitical premium support to silver prices following his comments that the US could move to occupy the Gaza Strip.
A combination of renewed geopolitical tension in the Middle East and global trade wars is a near-perfect mix for keeping safe haven assets on a continuous ascent. Also, the European Central Bank is expected to cut interest rates in March, translating to two rate cuts in Q1 2025. The bank lowered borrowing costs by 0.25% last week, and another cut next month is likely to increase the attractiveness of silver.
Looking ahead, attention will be on Friday’s release of the January Non Farm Payrolls (NFP) numbers for fresh clues on the likely trajectory by silver prices. In addition, US unemployment rate figures will add weight to the XAGUSD sentiment.
Silver Price Prediction
The momentum on silver price signals control by the buyers. The metal pivots at $32.36 and the upside will prevail if action stays above that level. XAUUSD will likely meet initial resistance at $32.52. A breach of that mark will clear the way to move to the next barrier at $32.60.
Alternatively, the sellers will take control if the price moves below the pivot level. In that case, support is likely to come at $32.25. An extended downward momentum will break below that level and invalidate the upside narrative. In addition, it could potentially send silver price to the second support at $32.12.
