Silver analysis: The strong upward trend continues, can it break through $40 in the future?
2025-07-18 19:56:00
On Friday (July 18), the spot silver (XAG/USD) price showed a trend of first fluctuating and then rising sharply on the intraday chart. Especially after 13:30 in the afternoon, the price broke through the previous fluctuation range and formed a clear upward trend. The intraday price was 38.382 US dollars/ounce, an increase of 0.72%.
Silver has recently shown a strong upward trend. After breaking through the key resistance level of $37.50, the price entered a high-level consolidation phase. According to the latest market data, as of July 17, the year-to-date increase in silver prices has reached 24.82%, far exceeding the performance of gold during the same period.
From a technical perspective, silver has formed solid support around $37.00, and the 50-day moving average (EMA50) provides dynamic support, indicating that bullish momentum still dominates the market in the short term.
Fundamental analysis of industrial demand drivers
Silver's strong performance is due to its dual attributes as an industrial metal and a safe-haven asset. The Silver Institute predicts that the silver market will see a supply-demand gap for the fifth consecutive year in 2025, with industrial demand expected to reach a record high of more than 700 million ounces. Demand in the photovoltaic industry continues to grow, and global solar installations are expected to hit a new high in 2025, although the Trump administration may put policy pressure on renewable energy projects in the United States. The electrification trend in the automotive industry and the demand for 5G technology and artificial intelligence-related electronic products have further pushed up silver usage.
Safe-haven demand and geopolitics
Geopolitical tensions and economic uncertainty have provided safe-haven support for silver. The Trump administration's tariff policy (which will take effect on August 1) has exacerbated global trade tensions, prompting investors to turn to precious metals to hedge risks.
Market sentiment shows that silver has attracted a large amount of capital inflows due to its safe-haven properties and industrial demand, especially in the Indian market. In June, silver ETF capital inflows reached 20.04 billion rupees, a year-on-year increase of 135%.
Additionally, market rumors that the Russian Central Bank may push up silver prices through undisclosed large-scale purchases further reinforced the bullish sentiment.
Macroeconomic Background
US economic data has an important impact on silver prices. The producer price index (PPI) was flat in June, lower than the expected increase of 0.2%, which strengthened the market's expectations of a September rate cut by the Federal Reserve (the current interest rate range is 4.25%-4.50%). The expectation of a rate cut weakens the attractiveness of the US dollar and may provide further support for silver prices.
However, Trump's tariff policy could trigger inflationary pressures and increase market volatility. The global economic slowdown could dampen some industrial demand, but the banking association expects structural growth in green economy applications to offset this impact.
Broker Forecast
Many institutions are optimistic about the price of silver in 2025:
Citigroup: Silver prices are forecast to reach $40 within three months, with a target of $43 for six to 12 months, emphasizing the supply-demand gap and support from industrial demand.
ANZ Research: The average price is expected to be US$35.40/oz in 2025, based on macroeconomic and industrial factors.
UBS: Forecast price is between $36 and $38 per ounce, emphasizing the demand for green technology.
TD Securities: Prices are expected to reach $36/ounce in the fourth quarter of 2025.
Technical Analysis
(Source of spot silver daily chart: Yihuitong)
After breaking through the resistance level of $37.50 recently, silver tested the year's high of $37.12 (June 17). If the price can stabilize above $37.50, the next target may be $39.50, or even break through the psychological level of $40.00.
The daily chart shows that the relative strength index (RSI) is close to the overbought area, but has not yet shown a clear divergence, suggesting that there is still room for upside in the short term. A break above $40.00 could trigger further inflows, pushing prices to test Citi's forecast of $43.00 (6-12 month target).
If the price falls back, $37.00 is the first support level, and if it falls below, it may further test $35.00 (50-day EMA and key psychological level). Stronger support is in the $33.00 to $34.00 range. A break below this area may trigger a deeper correction, but the bearish momentum is weak at present, and the market still prefers to "buy on dips".
Trading strategies
Buy on dips: Look for buying opportunities in the $37.00 to $35.00 range with a stop loss below $34.50 and a target of $39.50 to $40.00.
Breakout and buy: If the price breaks through $37.50 and stabilizes, consider buying, with a target of $40.00 and a stop loss at $37.00.
Silver has recently shown a strong upward trend. After breaking through the key resistance level of $37.50, the price entered a high-level consolidation phase. According to the latest market data, as of July 17, the year-to-date increase in silver prices has reached 24.82%, far exceeding the performance of gold during the same period.
From a technical perspective, silver has formed solid support around $37.00, and the 50-day moving average (EMA50) provides dynamic support, indicating that bullish momentum still dominates the market in the short term.
Fundamental analysis of industrial demand drivers
Silver's strong performance is due to its dual attributes as an industrial metal and a safe-haven asset. The Silver Institute predicts that the silver market will see a supply-demand gap for the fifth consecutive year in 2025, with industrial demand expected to reach a record high of more than 700 million ounces. Demand in the photovoltaic industry continues to grow, and global solar installations are expected to hit a new high in 2025, although the Trump administration may put policy pressure on renewable energy projects in the United States. The electrification trend in the automotive industry and the demand for 5G technology and artificial intelligence-related electronic products have further pushed up silver usage.
Safe-haven demand and geopolitics
Geopolitical tensions and economic uncertainty have provided safe-haven support for silver. The Trump administration's tariff policy (which will take effect on August 1) has exacerbated global trade tensions, prompting investors to turn to precious metals to hedge risks.
Market sentiment shows that silver has attracted a large amount of capital inflows due to its safe-haven properties and industrial demand, especially in the Indian market. In June, silver ETF capital inflows reached 20.04 billion rupees, a year-on-year increase of 135%.
Additionally, market rumors that the Russian Central Bank may push up silver prices through undisclosed large-scale purchases further reinforced the bullish sentiment.
Macroeconomic Background
US economic data has an important impact on silver prices. The producer price index (PPI) was flat in June, lower than the expected increase of 0.2%, which strengthened the market's expectations of a September rate cut by the Federal Reserve (the current interest rate range is 4.25%-4.50%). The expectation of a rate cut weakens the attractiveness of the US dollar and may provide further support for silver prices.
However, Trump's tariff policy could trigger inflationary pressures and increase market volatility. The global economic slowdown could dampen some industrial demand, but the banking association expects structural growth in green economy applications to offset this impact.
Broker Forecast
Many institutions are optimistic about the price of silver in 2025:
Citigroup: Silver prices are forecast to reach $40 within three months, with a target of $43 for six to 12 months, emphasizing the supply-demand gap and support from industrial demand.
ANZ Research: The average price is expected to be US$35.40/oz in 2025, based on macroeconomic and industrial factors.
UBS: Forecast price is between $36 and $38 per ounce, emphasizing the demand for green technology.
TD Securities: Prices are expected to reach $36/ounce in the fourth quarter of 2025.
Technical Analysis
(Source of spot silver daily chart: Yihuitong)
After breaking through the resistance level of $37.50 recently, silver tested the year's high of $37.12 (June 17). If the price can stabilize above $37.50, the next target may be $39.50, or even break through the psychological level of $40.00.
The daily chart shows that the relative strength index (RSI) is close to the overbought area, but has not yet shown a clear divergence, suggesting that there is still room for upside in the short term. A break above $40.00 could trigger further inflows, pushing prices to test Citi's forecast of $43.00 (6-12 month target).
If the price falls back, $37.00 is the first support level, and if it falls below, it may further test $35.00 (50-day EMA and key psychological level). Stronger support is in the $33.00 to $34.00 range. A break below this area may trigger a deeper correction, but the bearish momentum is weak at present, and the market still prefers to "buy on dips".
Trading strategies
Buy on dips: Look for buying opportunities in the $37.00 to $35.00 range with a stop loss below $34.50 and a target of $39.50 to $40.00.
Breakout and buy: If the price breaks through $37.50 and stabilizes, consider buying, with a target of $40.00 and a stop loss at $37.00.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
