January 19th 2024, Silver Chartbook — Resurgence confirms bullish outlook a for 2025
While gold posted a strong performance in 2024 and is most likely on its way back to its all-time high at USD 2,790 after a two-and-a-half-month consolidation, silver has been moving upward in gold’s slipstream. Despite reaching a high at USD 34.89 in October 2024, silver never really showed a life on its own. Instead it was mainly following gold. At least, these price levels around USD 35 have not been seen since 2012. Finally, after a 17.6% pullback down to USD 28.73, silver has recovered nicely over the last four weeks.
Silver supply and demand dynamics
Fundamentally, a key factor driving the silver market is the persistent supply-demand imbalance. For the fourth consecutive year, the silver market is experiencing a sizeable structural deficit. Global silver demand has reached approx. 1.2 billion ounces in 2024, which would be the second-highest level recorded. This surge in demand is primarily fueled by industrial applications, particularly in the renewable energy sector driven by growth in photovoltaics (PV) and automotive industries. Just the solar sector now accounts for nearly 20% of total industrial silver demand, reflecting the global push toward renewable energy. Additionally, the automotive industry’s increasing use of electronic components and investment in battery charging infrastructure continues to support silver’s off-take.
Silver supply remains limited in 2025 due to a combination of factors affecting the mining industry. Production growth has been stagnant since 2014, with many easily accessible high-quality deposits already exploited. Mining companies now face challenges of exploring deeper underground and in more remote areas, requiring significant infrastructure investments. The prolonged period of low silver prices in the past decade led to reduced exploration and development efforts, resulting in a lack of new major discoveries. Hence, no new mines are coming online in 2025. Additionally, geopolitical challenges in key producing regions like Russia and Kazakhstan have made it difficult to secure funding for supply expansion. All these factors continue to limit supply growth potential.
Investment Demand
The dual nature of silver as both an industrial and precious metal has contributed to its appeal among investors seeking diversification and potential growth. However, investment demand for silver has been rather muted in western countries. China and India on the other hand, have seen a significant surge last year. In particular, India has shown a very robust silver investment demand. During 2024, India’s silver imports increased dramatically in 2024 compared to the previous year. In the first nine months of 2024, India imported 6,390 tonnes of silver, a staggering 599% increase from the 914 tonnes imported during the same period in 2023. This surge in imports has already surpassed the usual annual import volume of around 6,000 tonnes. Overall, strong Eastern and Asian demand is contributing to the overall positive outlook for silver prices.
Silver in US-Dollar, Weekly chart
Silver in US-Dollar, weekly chart as of January 19th, 2025. Source: Tradingview
When examining silver’s price action over the past two decades, a pattern of extended trading ranges becomes apparent, each lasting for several years. Currently, silver is attempting to break free from its recent range of around USD 17.50 to USD 30, which has persisted for the last few years. If successful in this endeavor, the next potential trading range of USD 30 to USD 50 could be activated. However, the USD 30 resistance level has proven to be a formidable barrier, requiring significant momentum to overcome.
Resurgence confirms bullish outlook a for 2025
Looking at the oversold stochastic oscillator, the setup for a successful breakout to the upside could not be better. This aligns perfectly with the scenario outlined in our silver chartbook from mid-December 2024, suggesting that conditions are ripe for a potential upside breakout. Additionally, silver is attempting to break out of a falling wedge pattern, which often precedes significant price movements to the upside.
Complementing these technical factors is the strongly supportive seasonality typically observed in silver prices during the spring months. Given this confluence of factors, it’s reasonable to anticipate silver testing the next resistance zone around USD 35 within the next one to two months.
Overall, the weekly chart is bullish suggesting that silver is on the way to USD 35 and higher. Since we believe, that the USD 50 mark is now acting as a psychological magnet, and silver still has to show up to the party and literally take over the mic, it is conceivable to expect silver prices to explode into the coming months as it catches up to gold. However, it’s important to note that a move below the recent double low at USD 28.75 would seriously challenge this bullish outlook and require a reassessment of the market dynamics.
Silver in US-Dollar, Daily chart
Silver in US-Dollar, daily chart as of January 19th, 2025. Source: Tradingview
On the daily chart, silver’s recent price action has been noteworthy. After pulling back below its 200-day moving average (USD 30.32), silver formed a double bottom at USD 28.74 on December 19th and USD 28.78 on December 31st, 2024. This critical support level proved to be a turning point, from which silver staged a recovery, successfully reclaiming its falling 50-day moving average (USD 30.31).
Consequently, silver is now attempting to break out of a bullish falling wedge pattern. Thursday’s trading session initially hinted at an imminent breakout, but Friday saw a retreat, with prices falling back into the downtrend zone established from the October high. Currently, silver is trading above the crucial support level of USD 30, where both the 50-day and 200-day moving averages adding significance support to this psychological mark.
Short-Term Targets and Technical Hurdles for Silver
If silver can maintain its upward momentum and successfully break out of the falling wedge, the next target would likely be the early December highs around USD 32. This level could be reached relatively quickly following a confirmed breakout. However, reaching the October high of USD 34.89 presents a more significant challenge, requiring substantial more buying pressure and momentum.
Nevertheless, it’s important to note a potential headwind for silver’s upside potential in the short-term. The stochastic oscillator is currently showing overbought conditions, suggesting that the upward momentum might face some resistance in the near term. This technical indicator implies that silver might need to consolidate or experience a minor pullback before it can gather the strength for a sustained move higher.
To conclude, the daily chart for silver is bullish, albeit with signs of approaching short-term overbought conditions. The upward bending of the upper Bollinger Band suggests that there’s still potential for the rally to extend further, even in the near term. This upward pressure on one of the Bollinger bands typically indicates strong momentum and the possibility of continued price increases. Nevertheless, a brief and final dip below USD 30 cannot be ruled out. This potential pullback could offer a last-minute entry opportunity for those looking to participate in the anticipated longer-term bullish trend. Overall, while the immediate path may include some volatility, the broader technical picture supports a positive outlook for silver prices.
Conclusion: Resurgence confirms bullish outlook a for 2025
As we look ahead to 2025, the silver market presents a compelling narrative of potential growth and opportunity. The persistent supply-demand imbalance, driven by surging industrial applications and constrained production, sets the fundamental stage for a bullish outlook. With global silver demand reaching approximately 1.2 billion ounces in 2024 and supply remaining limited, the structural deficit is expected to continue, providing fundamental support for higher prices.
Technical analysis reinforces this positive sentiment, with silver poised to break out of its long-standing trading range. The weekly chart suggests a potential move towards USD 35 and beyond, with the psychological USD 50 mark acting as a magnet for prices. While short-term overbought conditions on the daily chart may introduce some volatility, the overall trend remains bullish. The convergence of technical indicators, seasonal patterns, and fundamental drivers creates a favorable environment for silver to potentially outperform in the coming months.
Navigating Risks and Opportunities in Silver’s Bullish Landscape
However, investors should remain vigilant of potential risks, including economic uncertainties and geopolitical tensions that could impact the precious metals market. A move below the recent double low at USD 28.75 would necessitate a reassessment of the bullish outlook. Nevertheless, with strong demand from emerging markets, particularly India and China, coupled with silver’s critical role in green technologies, the metal appears well-positioned for growth in 2025. As always, prudent investment strategies should account for both the opportunities and challenges presented by this dynamic but small market.
We are maintaining our price target of approx. USD 50 for silver by late spring 2025. The drivers are a strong technical momentum, seasonal trends, increasing industrial demand, favorable monetary policy shifts, and projected supply constraints.
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Disclosure: Silver Tiger Metals is a sponsor of Midas Touch Consulting. Silver Tiger Metals has no editorial control or veto rights. Midas Touch Consulting and members of our team might be invested in Silver Tiger Metals. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share.
This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
January 19th 2024, Silver Chartbook — Resurgence confirms bullish outlook a for 2025 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.