Silver price (XAGUSD) is down by almost 2% today, a day after it rose to its seven-year high of $30. The decline today is mostly because of the strong US dollar and profit-taking. Silver is not the only metal in the green today. Gold price is off from its yesterday’s high of $2077 while platinum and palladium prices are down by almost one percent.
Bank of America predicts that silver price will soar to $50
Analysts at Bank of America are known for their ambitious targets. Just a month ago, they predicted that gold price would double to $3,000. At the time, very few analysts were all that bullish on the metal.
And yesterday, an analyst at the bank predicted that silver price would soar to $50 if Joe Biden won the upcoming election. That is because of Biden’s plan to invest trillions of dollars in renewable energy.
If he does that, it would lead to high demand for silver, which is used in the manufacture of solar panels. As a result, the analysts estimate that annual demand for silver would increase by 87% to 4,272 tons in the next 15 years. As a result, this would lead silver production to a deficit.
Recent polls suggest that Joe Biden has an upper hand over Donald Trump.
The US is not the only country that would push silver prices higher. Consider the European Union, which recently passed a big $840 billion recovery fund. According to an analysis by Bloomberg, a substantial amount of this money will go to renewable energy, which could lead to more demand.
Silver price forecast
Silver price is trading at $28.27, which is a few points below yesterday’s high of $30. The monthly chart shows that silver price has risen in the past consecutive five months. Also, the price has moved above the 50% Fibonacci retracement level. This retracement connects the highest point in April 2011 to the lowest point in 2002. Further, silver price is above the 50-month and 100-month moving averages. Therefore, I suspect that the price will continue rising as bulls attempt to stamp their authority above $30.
On the flip side, a move below $21 will invalidate this trend. This price is along the 61.8% Fibonacci retracement level.