Silver Price Rebounds But Industrial Demand Limits Upside

Summary:
• Silver price breached the $30 mark on Monday amid rising concerns over the impact of trade tariff barriers on industrial demand.

Silver price returned to the upside on Monday, snapping a successive two-session decline. The greyish metal traded at $30.06 per ounce at the spot market after gaining 0.6% amid mounting risk aversion across the markets. Breaching the psychological $30 resistance is a boost for the XAGUSD momentum, and the underlying momentum signals that it could flip that mark into a support level.

Recession fears have creeped in financial markets as trade war escalates between the United States and its trading partners. This is a double jeopardy for silver price because it is not only exposed in the commodities markets, but its used as an industrial metal is also threatened by an impending demand slump.

At its current price, silver prices have dropped by about 10.2% since President Donald Trump announced reciprocal tariffs about a week ago. Stocks in Asia continued to trend downwards on Monday, with the SSE Index closing at -7.34% and Hang Seng Index declining by 13.22%. That likely set the tone for the European and US Stocks later in the day, with the losses likely to pile up in the coming days.

Meanwhile, the risk sentiment in the markets will likely push central banks to cut interest rates in the coming months; a move that could potentially boost the demand for safe haven assets like silver. According to the CME Fed Watch tool, there’s now 52% chance that the Federal Reserve will raise interest rates in May.

Silver Price Prediction

Silver price pivots at $29.70 and the momentum favours the upside to prevail if action stays above that level. The commodity will likely meet the first resistance at $30.56. However, a stronger momentum will breach that mark and potentially test $31.42.

Alternatively, the momentum is likely to shift to the downside if the price breaks below $29.70. That will likely see the first support established at $29.22. The upside narrative will be invalid if the price breaks below that level. Furthermore, an extended control by the sellers could send the action lower to test $28.63.