Silver pared most of its gains on easing Geo political tension. It hit a low of $29.98 and currently trading around $30.33.
The AI chip market is expected to grow rapidly, with a compound annual growth rate (CAGR) of 38.16% from 2024 to 2033, increasing the demand for silver used in microchips and electronics. Total silver demand could reach 1.2 billion ounces in 2024, with industrial use, especially in the AI sector, contributing significantly. The push for green energy will also boost silver demand as it is vital for solar panels and renewable energy technologies. Additionally, the growth of electric vehicles (EVs) will increase silver use since each EV contains about 25 grams of silver. Overall, silver prices are likely to rise above $30 per ounce due to demand outpacing supply and a projected shortfall in production.
The minutes suggest that more rate cuts may happen, with another possible cut in December. While inflation is easing, it is still above the Fed's 2% target, and employment gains have slowed, though unemployment remains low.
Current Market Indicators
The gold-silver ratio is currently at 86.54, showing that gold has outperformed gold recently. A ratio above 80 suggests silver might become a more attractive investment compared to gold.
Technical Analysis: Key Levels to Watch
For trading, the major level to monitor is $30. Silver is below key moving averages, with near-term support at $30. If it falls below this, it could target $29.60/$28.47. On the upside, immediate resistance is at $30.80; breaking this could lead to targets of $31.25/$31.75,$32.20, $32.75, $33, $33.60, $34, $34.50, and even $34.73.
Trading Strategy: Opportunities in the Current Market
It may be a good strategy to buy on dips around $29.60, with a stop-loss at $28.47 and a target price of $31.75.
