Silver Price Forecast: Can Bulls Regain $59 After Triangle Breakdown?
Prices for silver remain under a heavy sell-off burden, even though traders recognize that long-term industrial demand is strong...
Quick overview
- Silver prices are currently under pressure due to a heavy sell-off, trading around 57.53 as sellers dominate the near-term trend.
- Despite strong long-term industrial demand and a persistent supply deficit, macroeconomic factors and easing geopolitical tensions are hindering price increases.
- The key resistance level for silver is at $59.06, with potential targets of $61.55 and $64.27 if a breakout occurs.
- Conversely, falling below the immediate support at $55.61 could lead to further declines towards $53.11.
Prices for silver remain under a heavy sell-off burden, even though traders recognize that long-term industrial demand is strong. Prices traded around 57.53 for spot on July 7, after the metal fell from within the descending triangle that has formed over the last few weeks, and sellers now lead the trend in the near term. However, a reduction in the tension over international affairs and an increase in yields in the United States has put the lid on any significant advances.
At the same time, a shortage in supply and increased demand from the production of clean energy and high-tech industries have put a floor under the market in the long run. With prices coming into support, buyers must decide if they have the power to raise prices above the 59.06 range and the sellers the ability to push prices even lower after they broke this level.
Structural Supply Deficit Continues to Support Silver
Silver continues to be in a supply deficit this year for the 6th consecutive year. The deficit in 2026 is estimated at around 46M oz by the Silver Institute. Unlike other commodity supply, the silver production cannot be boosted quickly as the majority of the output comes from the mining of copper, lead and zinc, instead of silver mining alone. Silver demand also continues to lead supply, particularly in the industrial sector which has been responsible for more than half of silver consumption over the last few years. A portion of this industrial demand has come from the solar sector as the world ramps up renewable energy generation. In addition, the continued growth in electric vehicles, 5G data and artificial intelligence centres has added to silver consumption. In addition to industrial demand, the import of silver by China remains a factor. China continues to buy silver at a pace that keeps the global supply tight.
In the near-term, however, the macroeconomic environment has prevented investors from buying higher prices. The Islamabad Memorandum, an interim agreement between the US and Iran, has reduced tensions between the two countries and the subsequent reduction in the demand for a safe-haven has been reflected in the precious metals prices. Furthermore, oil prices have fallen, which has helped boost the economy through lower inflation costs and a decrease in defensive buying. At the same time, the Fed is also taking a wait-and-see approach on interest rate cuts. US treasuries yields and the dollar are holding higher than a few weeks back and higher yields increase the opportunity cost of holding the non-yielding precious metals. However, the latest soft employment reports continue to hint that interest rate cuts could happen in the future.
Silver Technical Analysis: $59.06 Becomes the Key Resistance
Silver’s bearish breakdown from the descending triangle on the four-hour chart signals a shift in short-term sentiment to sellers. Price is currently trading below the 200 EMA at $65.89.
Resistance is initially found at $59.06, the previous support level of the descending triangle. Holding above this point would signal short-term strength and opens the way for a retest at $61.55 and potentially $64.27.
The immediate support is at $55.61. A break below this point opens the way to $53.11 and the wider support at $50.70.
The relative strength index (RSI) is hovering at 42.9, with momentum weak but not yet oversold. The MACD histogram shows the indicator has flattened, indicating bearish pressure may be tapering off, however buyers are still yet to take control.
Silver Price Outlook
The metal benefits from significant fundamental drivers, with persistent supply crunches and industrial demand from renewables and high-tech. But tightening central bank policy and a stronger greenback, as well as easing geopolitical tensions, are a drag on short-term price action.
Technically, silver’s next move is contingent on a breakout from the $59.06 level. A decisive upside breakout could open the way to the $61.55 and $64.27 targets. Conversely, a fall below the $55.61 support increases downside risk towards $53.11. Until a clear trend emerges, the metal is likely to remain tied to macro data, Fed rate expectations and industrial sentiment.
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