As silver extended losses over successive trading sessions, a commodity strategist has identified key levels likely to be vital for the white metal and its relationship to gold.
In this regard, silver’s pivot at $30 per ounce now appears as a key support level following its recent surge, and the next price movement is likely to be influenced by gold’s continued strength or broader industrial demand, Bloomberg Intelligence senior commodity strategist Mike McGlone noted in an X post on October 25.
McGlone mentioned that silver’s recent move is closely linked to gold’s record-setting performance, suggesting that the momentum of the yellow metal was key to silver’s rally.
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However, silver’s role in this shift was not entirely independent; it traded more like an industrial metal, similar to copper.
According to the strategist, while silver has solidified $30 as support, its next hurdle lies between $35 and $40 per ounce. These levels are potential resistance areas where a further breakout could face challenges.
He noted that sustaining momentum above $35 could eventually lead to a test of $40, a level that, if broken, would signal a more significant bullish trend.
However, downside risks remain. Should silver fail to hold above $30, it may indicate weakness, potentially inviting selling pressure. Such a scenario could suggest reduced demand for both its precious and industrial metals.
“About $40 is the next silver resistance level above $35. Sustaining below $30 would indicate weakness,” McGlone said.
What next for silver’s price?
This outlook comes as silver has recorded a daily drop of 0.55%, trading at $33.50 as of press time. This weakness stems from factors such as the robust performance of the U.S. Dollar and higher Treasury yields.
At the same time, the precious metal is also in the red as data indicates that U.S. unemployment claims plunged in late October, suggesting strength in the labor market. These metrics imply that the Federal Reserve might hold off on interest rate cuts, a factor likely to impact silver demand.
Looking ahead, silver may face further volatility with the upcoming U.S. presidential election slated for November 5 and the situation in the Middle East. In this case, the metal might attract inflows from investors seeking safe-haven assets if the Middle East conflict escalates.
Meanwhile, an analysis by Gold Predictors in an X post on October 25 suggested that the metal has entered a consolidation phase after reaching its first minor resistance at $35.
Despite this short-term correction, overall sentiment remains bullish, with a possible target of $50.
Bullish sentiment is driven by factors including geopolitical uncertainty, technological advancements, and industrial demand for the metal.
In addition to these catalysts, a previous Finbold report indicated that the metal’s recent rally has benefited from potential demand in military applications.
As silver remains in one of the “hottest bull markets of all time,” investors like author Robert Kiyosaki continue advocating for accumulation before it becomes expensive.
