Silver prices faced pressure last week as the dollar and Treasury yields strengthened following U.S. inflation data that met expectations. Despite this pullback, silver remains poised for weekly and monthly gains, with a potential September rate cut by the Federal Reserve still in play.
The Commerce Department revealed on Friday that the US Personal Consumption Expenditures (PCE) Price Index rose 0.2% MoM in July, matching the market expectation. On a yearly basis, the PCE inflation remained unchanged at 2.5% in July. Meanwhile, the core PCE, excluding volatile food and energy prices, increased 0.2% for the month but rose 2.6% from a year ago. The annual figure was slightly softer than the 2.7% expected.
This, along with soaring global demand, particularly from the solar industry, continues to support silver prices. Notably, India’s silver imports have nearly tripled in 2024, further boosting demand.
The question remains: will silver break its key resistance this week?
Furthermore, according to source, the Solid-state EV batteries, like Samsung’s silver-based breakthrough, could significantly boost silver demand. These batteries offer a 600-mile range, 20-year lifespan, and 9-minute charging time, with an energy density nearly double that of current EV batteries. Each battery could use up to 1 kg of silver, potentially driving annual silver demand to 16,000 metric tons if 20% of global car production adopts this technology. This surge in demand presents a compelling investment opportunity in silver.
Additionally, rising geopolitical tensions are bolstering silver’s appeal as a safe-haven asset. This week, US Nonfarm payroll data could lead the volatility in the prices. A below then estimated Jobs data could extend the gains of Silver and it expected to break the resistance. Or vice versa.
Technical Outlook of Silver Prices
Last week, silver prices experienced significant volatility, reaching a high of 87,078 before retreating sharply to 83,650 and settling at 85,210, barely changed from the previous week’s close of 85,211.
The formation of a high wave doji candlestick signals indecision among silver traders, with prices now trading below key support levels from previous swings. The RSI offers no clear direction, adding to the uncertainty, while the widening gap in price action hints at the potential for a significant move this week.
On the upside, a fresh buying opportunity may only materialize if prices break above 86,320, targeting levels of 87,350 to 88,210. However, on the downside, a critical support level lies at 83,255; if breached, prices could sharply decline towards 82,300 or even 81,550.
Happy trading!
Commodity Samachar Securities
We Decode the language of the markets
Also Read: Nifty Breaks New Highs: 12-Day Rally Unstoppable
Recommended Read: Put-Call Ratio: How Does It Influence The Trader Mindset?
Want help on your Trade?
Chat with our Analyst