Silver prices have declined by -0.9% influenced by a stronger US dollar. The rally in the US dollar was driven by positive economic indicators and the potential for higher interest rates. This has put downward pressure on silver prices. Additionally, Chile's Chochilco anticipates a 9.4% decline in silver demand in 2024. Despite the decrease in demand, the market is expected to remain in a deficit. Technically, the market observed fresh selling with immediate support at 71540 and resistance at 72420.
The recent decline in silver prices can be attributed to the strengthening of the US dollar. As the US dollar strengthens, it becomes more expensive for investors holding other currencies to buy silver, leading to a decrease in demand and a subsequent decline in prices. The US dollar has been bolstered by positive economic indicators, including strong job growth and higher inflation expectations. Additionally, the potential for higher interest rates in the US has attracted investors to the dollar, further strengthening its value.
Chile's Chochilco, a state copper commission, has projected a 9.4% decline in silver demand in 2024. This decrease in demand is expected to be driven by weaker investment demand, particularly in the jewelry sector. However, despite the anticipated decline in demand, the silver market is expected to remain in a deficit. This is due to factors such as low global silver reserves and a projected deficit of 140 million ounces in the global silver market this year, according to Metals Focus. The deficit in supply and demand dynamics is expected to support silver prices in the coming months.
On a technical level, the silver market has observed fresh selling, with immediate support at 71540 and resistance at 72420. These levels indicate the price range within which silver is currently trading and provide important reference points for traders and investors. The market's reaction to these support and resistance levels will determine the short-term direction of silver prices.
Overall, the decline in silver prices can be attributed to the strengthening of the US dollar and the anticipation of a decline in silver demand in 2024. However, the market is expected to remain in a deficit, which could provide support for silver prices. Traders and investors will closely monitor the market's reaction to support and resistance levels to gauge the short-term direction of silver prices.