Silver's Uptrend Continues, What's Driving It?
Silver prices surged sharply in today's trading session, breaking through USD 53.57 per troy ounce, as demand increased from the industrial sector, institutional investors, and physical consumers in Asia ahead of the festive season. This price surge marks a continuation of the precious metal's strengthening trend, also seen in gold, amid growing global uncertainty and expectations of monetary policy easing by major global central banks.
One of the main drivers of silver's rise is rising physical demand, particularly from India ahead of the Deepavali festival later this month. At the same time, physical silver supplies in trading centers like London and Singapore have tightened, triggering high premiums on the spot market. A Reuters report stated that some jewelry retailers in India are even experiencing stock shortages due to surging domestic demand not being matched by imported supply.
In addition to seasonal demand factors, global investors are also beginning to look again to silver as an alternative hedge amid uncertainty over US fiscal policy due to a potential government shutdown. This, coupled with geopolitical tensions in the Middle East and Eastern Europe, is driving capital inflows into safe-haven assets like precious metals.
In its report, Bank of America even raised its medium-term silver price projection to USD 65 per ounce, citing a prolonged supply deficit and growing interest from institutional investors. Meanwhile, data shows inflows into silver-based exchange-traded funds (ETFs) have increased by more than 8% since the beginning of October.
From an industrial perspective, the increase in demand is also driven by the green energy and technology sectors, as silver is used in the manufacture of solar panels, electric vehicles, and semiconductors. With the global trend toward a clean energy transition, long-term demand for this metal is expected to continue to increase.
Technically, silver prices are currently moving in a strong area with support at USD 48 and resistance at USD 54–55. If the price can break through this resistance, the potential for strengthening to the USD 60 area is wide open. However, analysts warn of the potential for a short-term correction, given that the RSI indicator is already in overbought territory. A correction to the USD 48–50 area could actually be a buying opportunity for medium-term investors.
With the combination of strong fundamental factors and positive market sentiment, silver has the potential to maintain its momentum until the end of the month. Especially in the run-up to Deepavali, when physical demand from India typically peaks each year.
Source: Newsmaker.id
