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Silver Price Outlook: Grey Metal Comfortable Near $25.00 But Disruption Awaits

Silver prices rose marginally on Thursday as buying appetite fended off concerns over the incoming US data. The precious metal traded at $25.04 per ounce at the spot market and at $25.22 (+0.29%) at the futures market at the time of writing. The US dollar was supported by risk-off sentiment surrounding the scheduled release of February readings for Producer Price Index (PPI) and Retail Sales index.

However, there is growing confidence that the industrial and technology-driven demand for silver will keep prices stable in 2024. XAGUSD has shown greater tenacity than XAUUSD, as gold comes under pressure from US Treasuries and macroeconomic data.

Silver’s dabbling as an industrial metal could see it outperform gold in the medium term, as market jitters set in after the latest US CPI data showed a higher-than-expected inflation rate. The forecast-beating core inflation figures dented market confidence over a June interest rate cut by the Fed. On the other hand, the Silver Institute, in its latest report, stated that it expects the demand for silver to rise to 1.2 billion ounces in 2024, the second-highest on record, with industrial and technology needs being key drivers.

The $25.00 mark is crucial for support in the interim period to the US data release, and a gain to $26.00 could provide a psychological boost to propel a sustained rally heading into the weekend. The initial jobless claims figure is forecast to show a modest rise in new jobless registrations by 1,000 to 217k. On the other hand, Retail Sales are expected to show a rise in consumer spending in February by 0.8%, from January’s decline of -0.8%. 

A rise in either figure could point to a heating US economy and support higher-for-longer Fed interest rates, putting a lid on silver price gains. Also, US Treasuries have seen their yields rise to 4.20% on the 5-year and 10-year bonds in the past 24 hours, and this could also limit gains by XAGUSD.

Technical analysis

Silver price will be bullish in intraday trading as long as the buyers keep the price above $24.65 pivot. That could see them build momentum to go above the $25.15 resistance level and possibly have a go at $25.35. However, price action below the $24.64 pivot mark will favour control by the sellers, with the first support coming at $24.40. Extended control will likely break the support, and move the next target to $24.25.