3 Bullish Catalysts That Could Catapult Silver to New All-Time Highs in 2024
2024.10.01 07:28
closed September with an approximately 8% gain, successfully reversing the downtrend that had persisted for the previous three months.
Last week, the metal reached its highest levels since December, positioning itself for a strong finish to 2024.
As we enter the final quarter of the year, several macroeconomic factors are shaping the precious metals market.
Traders should closely monitor specific catalysts that could signal the continuation of the 29% gains silver has achieved so far this year.
Below, we’ll discuss 3 tailwinds that could continue to fuel the uptrend in silver for the rest of the year.
3 Catalysts That Could Drive Silver Prices Higher
Several macroeconomic developments and geopolitical factors are boosting demand for precious metals as safe havens, with silver particularly benefitting from industrial use and supply constraints.
As we enter the last quarter of 2024, the and other central banks are expected to continue the rate-cutting cycle, a significant catalyst that could lift both silver and prices.
The anticipated decline in currency returns tends to increase speculative demand for precious metals, making them attractive investment options.
- 1. Growing Industrial Demand
This year, the silver market has seen a pronounced increase in demand driven by industrial applications.
Factors such as a weaker heightened geopolitical risks, and silver’s historical status as a safe haven alongside gold are all supporting price increases.
Notably, the rising demand for jewelry, which relies heavily on silver, could drive prices even higher. With increased market liquidity, the jewelry sector is poised to see greater demand, further boosting silver’s appeal.
Additionally, the green energy sector is becoming a key player in silver’s demand landscape.
The expansion of renewable energy technologies, including solar panels and electric vehicles, is expected to enhance the need for silver due to its essential role in manufacturing these products.
However, silver mining operations have faced slight declines throughout the year, indicating potential supply weaknesses.
This development bodes well for prices, as lower supply combined with strong industrial demand could propel silver higher in the long term.
- 2. The Fed and China’s Impact
Last month, the Fed’s 50-basis point cut provided a significant stimulus for precious metals, with expectations of continued rate cuts keeping demand strong.
Furthermore, China, a major commodity consumer, announced stimulus packages last week aimed at revitalizing its economy. This move is critical for boosting silver demand, especially alongside speculative interest and potential production revivals.
Despite these positive catalysts, profit-taking became evident after silver peaked at $32 last week.
Following China’s stimulus announcement, silver experienced a surge of around 5%, but pulled back amid indications that the Fed might adopt a more cautious approach to further rate cuts.
- 3. Gold-Silver Ratio Signals Outperformance
Looking at the gold-silver ratio, has been hovering around the 84 level for the past three weeks. As the ratio stabilizes in the second half of the year, it has tilted in silver’s favor since September.
Technically, a drop below the support line at 83.25 could signal a continuation of silver’s outperformance over gold in the coming periods. Conversely, maintaining support around the 83 level might allow gold to regain its strength relative to silver.
Key Levels for Silver Prices
From a technical standpoint, the recent downward momentum has pushed silver down to the $31 mark, supported by the Fibonacci 0.786 level.
Additionally, the short-term Exponential Moving Average (EMA) could act as a dynamic support. Observing the 8-day EMA during September’s upward movement illustrates its potential role in price stabilization.
This recent decline may simply be a pullback before reaching higher values. However, maintaining the $31 level is crucial for sustaining the upward trend.
If silver can hold around $31.20 this week, traders will likely refocus on the recent peak of $32.50. A breakout above this resistance, confirmed by daily closures, could pave the way for prices to move toward the $34-$36 range based on Fibonacci levels.
Conversely, breaking below the $31 support could push silver toward the Fibonacci 0.618 support at $30, with the next significant level appearing around $29.50.
This level aligns with the short-term trend line created during the summer’s pullback and the 3-month EMA value.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
