industrial and safe-haven demand to sustain breakout

Silver price is trading at August 2021’s level as a reaction to the Russian attack on Ukraine. Forecasts of higher industrial demand for the metal is also set to sustain its uptrend in coming months.

Russian attack

Following an announcement of a “special military operation” on Ukraine by President Putin, explosions have been reported in Odesa, Kharkiv, and the country’s capital city – Kyiv. According to the Ukraine government, at least 40 people have already lost their lives in the “full-scale war”. Consequently, governments from Europe, Asia, and the US have readied new sanctions against Russia.

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As is the case with other precious metals, silver’s demand as a safe haven has soared; boosting its price to August’s high. Similarly, gold price is at September 2020’s high of $1,971.81 while platinum and palladium rose to a three and six-month high of $1,125.63 and $2,656.81 respectively.  

Industrial demand

Silver price has been lagging behind that of other precious metals as supply chain disruptions impacted its demand as an industrial metal. However, as economies recover, silver price is likely to remain on an uptrend in coming months. According to the Silver Institute, its global demand is expected to rise by 8% to hit a record high of 1.112 billion ounces in the current year.

Silver price prediction

Silver price is trading at its highest level since August 2021 as financial markets react to the Russian attack on Ukraine. As at 10:42 a.m UTC, the precious metal was at 25.60. In a span of 24 hours, it has surged by 6.33%.

A look at the four-hour chart shows the likelihood of further gains in the ensuing sessions. It is trading above the 25 and 50-day exponential moving averages. Besides, it is in the overbought territory of 83. Indeed, the technicals, along with the fundamentals, portray a bull market.

In the short-term, I expect silver price to remain above 24.00, which is along the 50-day EMA. It may record a corrective pullback to the resistance-turn-support level of 24.68 before rallying further.

Above the intraday high of 25.60, the bulls will be eyeing the crucial zone of 26.00. However, this bullish outlook will be invalidated by a move below 24.00.