Silver approaches the $50 mark: technical indicators suggest a potential for reaching historical highs, with supply and demand imbalance fueling the rally

Technical Breakthrough Signals Bullish Outlook

This week, the silver market has entered a turning point. On September 2nd, silver prices surged to $40.9, reaching the highest level since 2011. This breakthrough is not a fleeting event but a key milestone in the main upward wave. Weekly technical charts show that silver is in a strong upward channel. After gapping higher and breaking through the $40 psychological barrier, upward momentum continues to strengthen. Financial commentator Peter Schiff pointed out that $40 is a psychological barrier for the market; once broken, it could trigger a chain reaction. According to technical analysis, silver’s all-time high of $50 is likely to be reached in the medium term.

Dual Drivers: Industrial Demand and Financial Attributes

The rally in silver is supported by solid fundamentals. Since April, silver has increased by 44%, far exceeding gold’s 20% rise in the same period, indicating growing market recognition of its industrial application prospects. The expansion of the new energy industry has driven increased demand for silver in industrial uses, and data from the International Silver Industry Association shows that the global silver market has experienced supply shortages for five consecutive years.

Meanwhile, recent upward momentum is more driven by its financial attributes. The simultaneous rise of silver, gold, and oil indicates that capital is making strategic adjustments. Expectations of Fed rate cuts and concerns over dollar credit risks are shifting investor focus from the dollar to precious metals. Analysts from the World Gold Council noted that ongoing market uncertainty, doubts about central bank policy independence, re-emerging stagflation risks, and overall dollar weakness are mutually reinforcing the attractiveness of precious metals. These supporting factors are expected to persist in the short term.

Bond Yield Fluctuations as a Key Indicator

Investors should closely monitor developments in the US and European bond markets. This week, bond yields in the UK, Germany, France, and the US all rose significantly, reflecting market concerns over rising inflation and fiscal deficits. A surge in bond selling will further weaken the appeal of dollar assets and continue to drive funds into precious metals as safe-haven assets. As dollar credit risk crises gradually unfold, the medium-term rally window for precious metals is opening.

Medium-Term Outlook: Silver’s All-Time High Within Reach

In the short term, silver is expected to maintain its strong momentum. Since the market is in the middle of the main upward wave, technical correction space may be limited, but there is still room for rebound. Considering macroeconomic factors and technical patterns, it is highly probable that silver will challenge the resistance near its historical high of $50 in the medium term.