According to analysts, most of Silver's recent gains are anticipated to continue into the new year. Experts predict that the price of silver will surpass gold in 2025, even though a probable U.S. downturn in the second quarter would affect industrial demand for the metal.
Silver's Gain Of 2024: Is It Solid?
Silver price has increased by the biggest percentage this year of all the precious metals. Both silver and gold have benefited from the start of the next stage of the worldwide rate of interest cycle in the previous year.
In the meantime, the price has also been physically sustained by the unrelenting rise in demand for solar photovoltaics and a robust recovery in projected demand from India.
Although this year's sector-leading rise was notable, the analysts noted that the high gold: silver ratio indicates that silver continues to be historically cheap in relation to gold. In the latter phases of bull markets, silver often performs better than gold, and a return to the 27-year average proportion of 67 due to a silver rally suggests a price of $40/oz.
What's For The US Dollar?
The price of gold (XAU/USD) is still at a one-week low in the current chart, like Silver. A challenge facing the non-yielding yellow metal is the growing consensus that the Fed would limit the speed of its rate-cutting cycle in the face of indications that the progress in bringing inflation down to the 2% objective has halted. Nevertheless, the commodity has some support from a number of sources.
Bulls of the US dollar (USD) remain cautious due to a slight decline in the yields on US Treasury bonds. Furthermore, worries regarding the policies of American President-elect Donald Trump and ongoing geopolitical threats serve to limit the price of Silver's decline.
Before Wednesday's pivotal FOMC policy meeting, which will be watched for clues about the future course of rate cuts and provide the bullion a new boost, traders may also choose not to place directional bets.
Silver Prices (XAGUSD) Technical Analysis
The ongoing bullish trend is visible in the daily chart of Silver price, where a potential bullish double-bottom breakout supports the current buying pressure.
In the broader context, the recent downside pressure from the 34.87 top has come with a counter-impulsive bearish pressure. As a result, the price came below the 50-day EMA line, raising a question about the ongoing buying pressure. However, the 200-day Simple Moving Average is still protected ,and a bullish rebound is potent as long as this line is protected.
Based on the daily outlook of XAGUSD, a bullish rebound might come as long as the double bottom low is protected. A bullish rebound with a daily close above the 59 day EMA could extend the upward pressure at the 34.00 psychological line.
On the bearish side, an immediate bearish reversal with a daily close below the 200 day SMA line might be a bearish factor, increasing the possibility to test the 27.47 support level.
