- XAG/USD hits $38.85, its highest level since 2011, fueled by increased safe-haven and industrial demand.
- Trump’s 50% copper import tariff sparks fresh interest in silver as a substitute metal.
- Ongoing green energy demand and a global silver supply deficit provide fundamental support.
- Fed’s cautious stance on rate cuts may limit silver’s upside due to US Dollar strength.
Silver Price Forecast: Bullish Momentum Strengthens Above $38.50
Silver (XAG/USD) rallied sharply in early Monday trading, climbing to $38.85, its highest price in over a decade. The surge was driven by a combination of rising industrial demand and renewed interest in silver as an alternative to copper following the announcement of fresh US trade tariffs.
Last week, former President Donald Trump revealed plans to impose a 50% tariff on copper imports, effective from August 1. The move is expected to drive up copper costs significantly, prompting manufacturers to seek cheaper alternatives — with silver becoming an attractive substitute due to its similar conductivity and widespread use in electronics and clean energy.
Strong Demand from the Green Economy Fuels Silver’s Rally
Silver continues to benefit from robust industrial demand, particularly from the renewable energy and electric vehicle (EV) sectors. According to data from the Silver Institute, global silver demand is expected to outpace supply for a second consecutive year, keeping the market in a structural deficit.
As manufacturers increase their reliance on silver for solar panel production, EV batteries, and electronics, the bullish fundamentals remain intact — even as broader macroeconomic concerns loom.
Fed Policy and USD Strength May Cap Short-Term Upside
Despite silver’s strong breakout, gains may face temporary resistance as traders eye the US Federal Reserve’s next policy move. The Fed is widely expected to keep interest rates unchanged in the near term as it monitors the inflationary impact of the new tariffs.
A stronger US Dollar typically weighs on silver prices, as it raises the cost of dollar-denominated metals for foreign buyers. However, if the Fed leans toward easing due to global trade uncertainty, it could renew bullish momentum in precious metals.
Technical Outlook: XAG/USD Eyes Breakout Toward $40
From a technical perspective, silver’s recent breakout above $38.50 confirms a strong bullish structure. Momentum indicators such as the Relative Strength Index (RSI) remain elevated, suggesting continued upside potential in the short term.
If XAG/USD clears resistance at $39.00, the next psychological target lies at the $40.00 level. On the downside, initial support is seen around $37.80, followed by the nine-day EMA near $36.90.
Conclusion:
Silver remains well-positioned for further gains amid macroeconomic uncertainty, rising green tech demand, and copper-related trade tensions. While the Fed’s cautious tone may limit explosive upside in the near term, the long-term outlook for XAG/USD remains bullish as industrial and investment demand continues to grow.
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