Silver price has remained in the bull market ; having rallied by close to 20% over a span of three weeks. While the stabilization of the banking crisis has eased the demand for safe havens, momentum of the China’s economic recovery continues to boost the commodity’s gains.
Silver price movements in recent weeks have been based on its dual status – as a precious and industrial metal. To begin with, the banking crisis has been a major bullish driver of precious metals. This is based on their role as conventional safe havens.
For instance, gold price recently rose past the psychologically crucial zone of $2,000 an ounce after a one year hiatus. Over the past three weeks, this precious metal has rallied by about 9%. In comparison, silver price has risen by close to 20% during the same timeframe.
On the one hand, financial markets view the banking crisis as having stabilized. This has led to a decline in the demand for safe havens. In fact, this is largely the reason why bulls in the gold market have failed to yield enough momentum to retest the psychological level of $2,000. Granted, the easing of the US dollar has continued to offer support to the metals.
However, beyond its status as a precious metal, silver price movements are also being driven by its position as an industrial metal. In particular, the Chinese economy has been an influential factor in recent months. This is founded on the fact that the Asian country is the leading importer and consumer of the metal.
Earlier on Friday, silver price hit a fresh two-month high in reaction to the Chinese business activity data. Figures released by the country’s National Bureau of Statistics showed that economic recovery gathered momentum in March.
The manufacturing PMI surpassed analysts’ forecast at 51.9. Granted, it eased slightly from February’s figure. Even so, a reading above 50 represents expansion. Besides, the PMI for the non-manufacturing sector rose to 58.2 in March; its highest level since 2011.
Silver price prediction
Silver price hit a fresh two-month high earlier on Friday as the bulls remain in control. In addition to trading above the 25 and 50-day EMAs, it is at the periphery of the overbought territory with an RSI of 70.
While the bullish trend is set to continue, I expect the metal to yield a corrective pullback. As such, the resistance level at 24.08 will be worth watching as the bulls strive to defend the support at 23.57. Below that range, silver price may find support at 23.15. On the upside, further rallying will have the bulls eyeing the next target at 24.32.