Silver on the Rise: Industrial Demand Fuels Investment Interest and Price Potential

Silver showed a minor pullback as industrial demand increased, hitting a low of $30.18 and currently trading around $31.22.

Rhona O’Connell's Insights

Rhona O’Connell, head of market analysis at StoneX, has shared her views on the silver market's current state. She notes that silver's price is influenced by both industrial demand and investment trends, as it serves as both a precious metal and an industrial commodity. Recently, there has been a rise in investment demand for silver, with more investors seeking it as a hedge against inflation and economic uncertainty, especially amid geopolitical tensions.

Importance of Physical Purchasing

O’Connell highlights the importance of physical purchasing in the silver market, as increased buying from retail investors and central banks can push prices up. While central banks have been focusing on gold, there is also growing interest in silver as a reserve asset, which could support its price in the long term. Although specific price targets weren't discussed, O’Connell believes silver could experience significant price movements if the current trends continue. Overall, she presents a cautiously optimistic outlook for silver, driven by increased investment interest and physical demand.

Industrial Demand and Technological Importance

Silver is essential for many modern technologies due to its high conductivity, making it important for electronics, solar panels, and electric vehicles. The growing focus on renewable energy is increasing silver's industrial demand. Investors are also turning to silver as a safe investment against inflation and currency fluctuations, especially during economic uncertainties and geopolitical tensions. Additionally, the shift towards sustainability is boosting silver's role in green technologies. Overall, analysts expect that strong demand from both industries and investors could lead to significant price increases for silver in the coming years.

Current Market Indicators

The gold-silver ratio is currently at 83.88, showing that silver 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 $30.80. If it falls below this, it could target 29.60/\28. On the upside, immediate resistance is at $31.75; breaking this could lead to targets of $32.20, $32.75, $33, $33.60, $34, $34.50, and even $34.73.

Trading Strategy: Opportunities in Current Market

It may be a good strategy to buy on dips around $31.25, with a stop-loss at $30.75 and a target price of $32.