Silver prices have risen due to a supply and demand gap, with demand outstripping supply for the fifth consecutive year. Industrial demand, driven by green energy, AI, and EVs, now accounts for 64% of global silver demand. A potential slowdown in China’s economy and prolonged high interest rates could dampen silver prices. Silver prices have seen a remarkable rise this year, with demand for silver continuing to outstrip supply. The primary drivers of the silver supply squeeze are the Green Energy Transition, particularly solar energy, and the high demand from the Artificial Intelligence and electric vehicle (EV) sectors. A recent dip in demand from China and the possibility of a slowdown in the Chinese economy could help balance the demand and supply gap. The US CPI data has the potential to provide silver a shot in the arm and provide some impetus from a move away from the psychological 30.00 handle. From a technical standpoint, silver broke out of a bullish pennant pattern on the daily chart on July 3, which led to a rally up to around 31.50 before entering a pullback and consolidation phase. The 100-day MA is nearing a golden cross with the 200-day MA, suggesting further upside and bullish momentum. However, if a 4-hour candle closes below the 30.600 level, it would signal a change in structure, invalidating the current bullish setup.
The recent rise in silver prices can be attributed to a supply and demand gap, with demand outstripping supply for the fifth consecutive year. Industrial demand, driven by green energy, AI, and EVs, now accounts for 64% of global silver demand. The primary drivers of the silver supply squeeze are the Green Energy Transition, particularly solar energy, and the high demand from the Artificial Intelligence and electric vehicle (EV) sectors. These sectors have fueled the demand for silver, leading to a rise in prices. Additionally, a recent dip in demand from China and the possibility of a slowdown in the Chinese economy could help balance the demand and supply gap, potentially impacting silver prices. Furthermore, prolonged high interest rates could also dampen silver prices. Traders and investors will closely monitor the US CPI data for any potential impact on silver prices. From a technical standpoint, silver broke out of a bullish pennant pattern on the daily chart on July 3, which led to a rally up to around 31.50 before entering a pullback and consolidation phase. The 100-day MA is nearing a golden cross with the 200-day MA, suggesting further upside and bullish momentum. However, if a 4-hour candle closes below the 30.600 level, it would signal a change in structure, invalidating the current bullish setup. [3a8bb17c]