Silver Price Struggles: Testing $30 Resistance Amid High Yields

The silver price has been under significant pressure, struggling to break through the $30 resistance level despite heightened geopolitical tensions in the Middle East. The recent escalation between Israel and Iran has failed to provide the expected boost to the silver price, which instead has been influenced by rising US bond yields and expectations of a gradual rate-cut cycle by the Federal Reserve in 2025.

Current Market Dynamics

The silver price (XAG/USD) has dropped sharply to near $29.60 in a thin trading volume session following the holidays on Christmas and Boxing Day. This decline is attributed to the rise in US bond yields, which have been driven by expectations that the Fed will follow a gradual rate-cut cycle in 2025[1]. The geopolitical tensions in the Middle East, including Israel’s missile strikes at the Iran-backed Houthis military and the bombing of the Yemini airport, have not been enough to lift the silver price.

Technical Analysis

From a technical standpoint, the silver price has broken down the upward-sloping trendline around $30.00, which is plotted from the February 29 low of $22.30 on a daily timeframe. The white metal is currently wobbling around the 200-day Exponential Moving Average (EMA), indicating uncertainty in the longer-term outlook[5].

– **Key Support and Resistance Levels:**

Market Outlook

The silver price forecast for December 2024 had initially predicted a high of $33.33 and a low of $29.00, with an average price of $30.99 for the month[3]. However, the current market dynamics suggest that the silver price may struggle to extend the upward-sloping trendline above $30.00.

Long-Term Projections

Despite the short-term challenges, some analysts remain bullish on silver’s long-term prospects. For instance, InvestingHaven.com predicts that silver will eventually hit $48-$50, although this target has been postponed to mid-2025[4]. The research team emphasizes that the silver price will need to clear the $34.70 level before making a move towards $37.70 and eventually reaching the higher target.

Conclusion on Current Trends

The silver price is currently testing the $30 resistance level amid high yields and expectations of fewer rate cuts by the Fed in 2025. The geopolitical tensions in the Middle East have not provided the expected boost, and the technical analysis suggests uncertainty in the longer-term outlook. Investors will need to closely monitor the silver price’s movement and the broader market dynamics to make informed decisions.