Silver Price Prediction 2025: Will XAG/USD Break Above $35?
The comments below are an edited and abridged synopsis of an article by Fawad Razaqzada, Market Analyst
(516 words, 3 minutes read time.)
Silver has started 2025 on a strong note, following an impressive 21% gain last year. The metal has risen 4.1% year-to-date. While silver lagged behind gold in reaching record highs in 2024 due to economic concerns in China, its long-term prospects remain promising. The question is whether silver can break through the $35 mark this year. Let’s delve into the factors driving this outlook.
Key Drivers of Silver’s Performance
China’s Economic Recovery
China, as the world’s second-largest consumer of silver, plays a critical role in shaping silver demand. Economic recovery in China, fuelled by the country’s monetary stimulus, could significantly boost silver’s price. Improved economic data would not only benefit industrial demand, but also bolster silver’s appeal as a precious metal.
US Monetary Policy
In the US, tight monetary policies are expected to persist into early 2025. Elevated bond yields and a strong US dollar pose challenges for silver in the short term. High yields make non-yielding assets like silver less attractive, while a strong dollar increases its cost for international buyers. However, resistance in the US Dollar Index around the 109.00–109.50 range hints at potential dollar weakness, which could ease pressure on silver prices.
Green Energy Demand and Geopolitical Tensions
Silver’s role in renewable energy technologies ensures robust long-term demand. Additionally, geopolitical tensions and inflationary pressures enhance its status as a safe-haven asset. These factors help maintain silver’s bullish outlook, offsetting some short-term headwinds.
Silver’s Technical Analysis
Silver peaked at $34.87 in October 2024, but has since experienced lower highs and lows. The metal is currently trading below several key moving averages, signalling a loss of short-term bullish momentum.
Despite this, the long-term uptrend remains intact. Current price movements resemble the May–August 2024 consolidation, which preceded a sharp rally. A similar breakout could see silver targeting the $35 level.
At present, silver is trading around the $30 mark, testing a previously broken trend line from 2024. A break back above this level would be a bullish technical signal. Conversely, a drop below $30 could see silver retesting the $28.80–$29.00 support zone. A rebound from this area would reinforce the bullish trend, while a break lower could shift focus to $26.00–$26.50.
Trading Scenarios
- Bullish Scenario: A close above $30 would signal renewed momentum, with the December high of $32.34 as the next target and $35 within reach.
- Bearish Scenario: A break below $28.80 could lead to further declines toward $26.00–$26.50, weakening the bullish outlook.
Conclusion
Silver’s outlook for 2025 remains cautiously optimistic. While short-term challenges like US monetary policy persist, the metal’s role in renewable energy and its safe-haven appeal underpin its long-term prospects. A decisive move above $30 could set the stage for silver to test $35 and potentially surpass it this year. Investors should keep a close eye on key technical levels to navigate the evolving market conditions effectively.