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Silver Bulls in Charge With Eyes on $30+ Levels Ahead of CPI - How to Trade It

Published 10/04/2024, 10:08
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  • Gold prices are soaring and silver could follow suit with a rally toward historic highs.
  • Increasing demand in electronics and renewable energy sectors and geopolitical tensions have propelled silver toward 2021 peaks
  • As silver breaches key resistance at $26 per ounce, eyes are on $29 levels, with a possible correction offering buying opportunities near $26.50 per ounce.
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  • Gold prices have been hitting new records almost daily while silver still has room to reach its historical highs, indicating significant upside potential for the white metal.

    The persistent supply-demand imbalance, escalating geopolitical tensions in the Middle East, and the possibility of interest rate cuts on both sides of the Atlantic are driving this emerging bull market.

    These factors suggest that the current surge in demand may be part of a broader uptrend that could eventually break through 2021 highs.

    Silver Finally Starting to Catch Up to Gold

    The Silver Institute predicts global silver demand to reach 1.2 billion ounces this year, outpacing the supply of 1.02 billion ounces, resulting in another deficit year.

    Industrial demand, particularly in the electronics and renewable energy sectors, is a major driver, with the photovoltaic industry witnessing significant growth rates.

    The rise in demand aligns with the green agenda, especially in the European Union. Additionally, the jewelry sector, with India as a key player, maintains stable demand.

    On the supply side, Mexico holds the largest share of the global market, followed by China and Peru. Although the supply may see a slight increase in the coming years, it is unlikely to keep pace with accelerating demand.

    Regarding monetary policy, investors are closely watching the Federal Reserve. While market expectations lean towards interest rate cuts later in the year, the FOMC members' hawkish stance and strong US economic data have sparked uncertainty..

    However, if the market expectations materialize, it would further boost both silver and gold.

    Technical View: Silver Eyes 2021 Highs

    Silver bulls are currently driving the rally after it broke through a key resistance level of around $26 per ounce. This breakthrough has paved the way for further upward movement.

    Currently, buyers are pushing the price toward the highest levels seen in mid-2021, which is around $29 per ounce.

    Silver Price Chart

    In the bullish scenario, the next target for the bulls should be the important highs located just below $30 per ounce.

    A possible correction near $26.50 per ounce could be an interesting opportunity to buy at a relatively better price.

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    Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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