Silver Price Approaching Highest in 12 years at $32.50
Yesterday, silver surged over $1.50, breaking above $32 and maintaining its strong upward momentum for the month. The metal now seems to be approaching $32.50, which marks this year’s high, potentially opening the door to revisit 2012 levels. Unlike gold, which has been setting record highs almost daily, silver has been hitting higher lows throughout the year but still remains far from its all-time peak.
Silver turned bullish in August after a three-month decline, rebounding from $32.50 in May. The weakening U.S. dollar has been a key factor in silver’s recovery, allowing it to regain ground above the $30 mark. Pullbacks have been well-supported by the moving averages (MAs) on the 4-hour chart, where buyers continue to step in.
Silver Chart H4 – The 50 SMA Acting As Support
The 50-day Simple Moving Average (SMA), which acted as resistance during the summer, has now become a crucial support, helping to stem declines and triggering several recoveries. Since the August low of around $26.50, silver (XAG/USD) has rallied by roughly 6 cents, breaking through a downtrend line from May. While no clear signs of a reversal are present, the current price action suggests caution, as silver remains vulnerable to a potential correction.
Geopolitical and Economic Drivers for XAG
Investors are increasingly turning to precious metals like silver amid growing economic uncertainty and rising geopolitical tensions, particularly in the Middle East and Ukraine. Escalating conflicts between Israel and Lebanon, have added to the appeal of SILVER and the status as a safe haven has been amplified by these geopolitical concerns.
FED and PBOC Rate Cuts Fueling Silver’s Rally
The recent rise in silver and gold prices is also driven by shifts in central bank policies. The U.S. Federal Reserve cut interest rates by 50 basis points last week, followed by the People’s Bank of China (PBOC), which made a similar 50 basis point reduction yesterday. In addition to cutting key interest rates, the PBOC lowered the reserve requirement ratio for banks, releasing liquidity into the market. China’s stimulus plan, its largest since the pandemic, is helping to combat deflationary pressures and has led to an increase in demand for both gold and silver, particularly in the form of bullion.
Silver Live Chart
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