Silver prices experienced a minor decline of -0.27% on the trading day prior, closing at 83273, as profit booking took precedence following earlier gains. The uptick in profit-taking occurred amidst heightened geopolitical tensions in the Middle East, notably triggered by Israel’s vow to retaliate against Iran’s attack, instigating apprehension across global markets. Such uncertainties amplified silver’s allure as a safe-haven asset.
Moreover, the demand for silver remained buoyant due to its indispensable role in various industrial sectors, notably electronics and solar power. This sustained demand continued to outpace the growth in its supply, evident from the dwindling above-ground inventories held in LBMA and exchanges in recent years.
Despite the conducive market conditions, the release of robust US retail sales data and hawkish remarks from Federal Reserve Chair Jerome Powell contributed to the anticipation of prolonged restrictive monetary policies. Consequently, this exerted downward pressure on silver prices.
According to projections from the Silver Institute, the global silver deficit is forecasted to expand by 17% in 2024, reaching 215.3 million troy ounces. This surge is attributed to robust industrial consumption and a slight contraction in total supply.
From a technical perspective, the market observed long liquidation, with a notable decline in open interest by -6.12%. Presently, silver finds support at 82900, with a potential downside test towards 82530. On the contrary, resistance is envisaged at 83820, with a potential upward trajectory towards 84370 upon surpassing this level.
Traders are advised to vigilantly monitor these key levels, factoring in both geopolitical developments and monetary policy signals to capitalize on potential trading opportunities. The ongoing geopolitical tensions and robust industrial demand are expected to lend support to silver prices, although the outlook on monetary policy may introduce fluctuations in the market.