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Analysis

Silver Technical Analysis | Factors Influencing Silver Price in 2024

BY Janne Muta

|January 15, 2024

Silver Technical Analysis – Analysts predict a strengthening in industrial demand to bolster silver prices, setting a target of about $26/oz by mid-2024. Influential factors, including reduced interest rates, stronger physical investment, and rising industrial demand, are anticipated to constrict market conditions. Estimates range from silver hitting $26 per ounce by mid-year to reaching $30 in 2025.

There are reports of a growing concern about a silver shortage. This is primarily due to a decrease in total silver supply, as production losses at major mines, like the Penasquito mine, have been observed. In contrast, non-investment demand, mainly from industrial use, has reached an all-time high, especially for applications like photovoltaic solar cells.

The combination of dwindling mine production and strong industrial demand suggests an undervaluation of silver and points towards a potential supply squeeze​.

Summary of This Silver Technical Analysis Report:

  • Silver's market showed a bullish tendency last week, with a significant entry point at 22.47 and a rejection candle indicating upward momentum. The potential break above 23.52 could solidify this trend, targeting 24.60. However, the moving averages' sideways movement suggests a lack of strong momentum.
  • The daily chart revealed a double bottom pattern, leading to a rally after a bullish rejection candle. A crucial juncture is surpassing the 23.52 resistance, potentially paving the way to 24.60. Failure to do so and breaking below Thursday's low might direct the market towards 21.87.
  • In the intraday scope, a bearish rejection candle was noted in the US session, with a lower reactionary high at 23.32 hinting at a potential downtrend towards 22.80, and possibly 22.47.

Read the full Silver technical analysis report below.

Silver Technical Analysis

Silver Technical Analysis, Weekly Chart

Weekly Silver Technical Analysis

The silver market attracted buyers last week at 22.47, resulting in a bullish rejection candle. If the market can now decisively rise above last week's high of 23.52, it would confirm this bullish indication. Our silver technical analysis suggests that as a result, the market could move to 24.60.

The market has some upward bias, though the moving averages indicate a lack of momentum as they are currently moving sideways. The stochastic oscillator is approaching oversold levels, which aligns with the price action-based silver technical analysis, as the market is trading relatively close to a key support level at 22.47.

Silver Technical Analysis, Daily Chart

Daily Silver Technical Analysis

The market formed a double bottom on the daily chart and then rallied on Friday. This rally was preceded by a bullish rejection candle. Now, the market needs to break above a market structure level at 23.52, which is also last week's high as mentioned in the weekly silver technical analysis. This could pave the way to the next key resistance level at 24.60. Alternatively, if the 23.52 level cannot be breached and the market falls below Thursday's low, a move down to 21.87 could become likely.

Silver Technical Analysis, Intraday Chart

Intraday Silver Technical Analysis

The market formed a 4-hour bearish rejection candle during the US session on Friday. Today, silver reached a lower reactionary high at 23.32, indicating that the market might move lower. If it drops below 23.32, the market could decline to 22.80 and then potentially to 22.47.

Indicator-based silver technical analysis suggests that the market is attempting to reverse the previous downtrend, as the 20-period moving average is nearing the 50-period SMA.

Silver technical analysis - Client Sentiment Graph

Client sentiment analysis

53% of clients trading XAGUSD are holding long positions, while 47% are holding short positions. Client sentiment data is being provided by TIO Markets Ltd.

It’s good to remember that retail client trading sentiment is a contrarian indicator as most retail traders are on average trading against market price trends. This is why experienced traders tend to trade against the retail client sentiment. You can follow the TIOmarkets client sentiment live on our Forex dashboard.

The next key risk events impacting this market

• USD - Empire State Manufacturing Index

• USD - WEF Annual Meetings

• USD - Core Retail Sales m/m

• USD - Retail Sales m/m

• USD - Industrial Production m/m

• USD - Unemployment Claims

• USD - Building Permits

• USD - Philly Fed Manufacturing Index

• USD - Prelim UoM Consumer Sentiment

• USD - Existing Home Sales

• USD - Prelim UoM Inflation Expectations

Potential Silver Market Moves

The market needs to break above a market structure level at 23.52, which is also last week's high as mentioned in the weekly silver technical analysis. This could pave the way to the next key resistance level at 24.60. Alternatively, if the 23.52 level cannot be breached and the market falls below Thursday's low, a move down to 21.87 could become likely.

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How Would You Trade Silver Today?

I hope this silver technical analysis helps you to make better informed trading decisions. Check the latest market analysis for other instruments and subscribe to receive them in your inbox as soon as they are published

DISCLAIMER: TIO Markets offers an exclusively execution-only service. The views expressed are for information purposes only. None of the content provided constitutes any form of investment advice. The comments are made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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