Silver has long held a dual identity: a precious metal cherished for its beauty and a critical industrial material driving technological advancements. Last week, this duality was on full display as silver prices experienced a roller-coaster ride, reflecting both bullish momentum and market challenges.
Silver opened the week strong at $31.88 per ounce, hitting a high of $32.69 midweek before closing at $30.52 on Friday, marking a 1.31% decline for the week. While this slight drop reflects profit-taking by investors, it does not overshadow silver’s overall strength in 2024, with a year-to-date gain of 28%.
The midweek high marked a significant moment for silver, as it consolidated its position above the critical $30 threshold, a level not breached in nearly four years. Analysts noted that this breakout triggered stop-loss orders from bearish traders and brought fresh bullish interest into the market.
Industrial demand remains the cornerstone of silver’s growth, especially from the renewable energy sector. Solar photovoltaic (PV) production continues to drive silver consumption, with global installations on track to surpass previous records. Silver paste, a key component in solar cells, accounted for a significant portion of the demand spike last week. Beyond solar, silver’s role in electronics, medical devices, and battery technologies also contributed to its robust performance.
On the precious metal side, silver benefited from the same macroeconomic factors that bolstered gold. A weaker U.S. dollar, anticipation of Federal Reserve rate cuts, and inflation-hedging demand supported silver’s upward trajectory.
Despite its strong fundamentals, silver faced headwinds last week. Overbought conditions following its breakout above $30 triggered profit-taking by traders. Additionally, analysts warned that resistance at $32 could prove challenging to overcome in the short term without further consolidation.
Another factor influencing silver’s price dynamics is its inherent volatility. Unlike gold, silver’s dual role makes it more susceptible to industrial cycles and speculative trading. This volatility was evident in the sharp intra-week movements, with prices testing both support at $30 and resistance near $32.
Silver’s technical breakout above $30 has set the stage for potentially higher gains. Analysts are eyeing mid-$30 levels as the next target, with Fibonacci extensions suggesting long-term bullish potential toward $42. However, maintaining the $30 support level is critical for sustaining this momentum.
From a longer-term perspective, silver’s industrial applications in renewable energy and green technologies position it for sustained growth. As governments worldwide push for decarbonisation and renewable energy expansion, silver’s role in these sectors will likely ensure steady demand.
While short-term volatility is expected, the outlook for silver remains positive. The combination of industrial demand and macroeconomic support creates a strong foundation for continued growth. Analysts advise investors to monitor technical patterns, including consolidation phases, which could provide opportunities for further bullish moves.
With strong fundamentals driven by the renewable energy boom and macroeconomic trends, silver is well-positioned for continued gains. However, navigating its volatility will require a careful balance of technical analysis and long-term strategy.
