Peter Smith
Silver prices are at a pivotal moment in January 2025, consolidating below the $30.97 resistance level despite recent bullish momentum. The metal gained 2.25% in the Asian session on Friday, supported by favorable macroeconomic factors like calls for interest rate cuts by US President Donald Trump and easing US-China trade tensions.
Silver Sees Renewed Bullish Momentum
Silver's price movement in January 2025 suggests a tug-of-war between bullish optimism and resistance at critical price levels. After reaching a high of $30.97 last week, silver is facing challenges breaking above this resistance. Despite a slight setback earlier in the week, the precious metal regained bullish momentum during Friday's Asian session, climbing 2.25% to $31.33 after finding support at the 100-day Exponential Moving Average (EMA).
Trump’s Policy Remarks Drive Optimism
The upward movement in silver coincides with comments made by US President Donald Trump at the World Economic Forum in Davos. Trump called for the Federal Reserve to lower interest rates, citing falling oil prices as a pressing concern. Lower interest rates traditionally favor non-interest-bearing assets like silver, as they become more attractive to investors.
Furthermore, after a conversation with Chinese President Xi Jinping, Trump expressed optimism about easing US-China trade tensions. As China is the largest global consumer of metals, any reduction in trade tensions could boost industrial demand, further supporting silver prices.
Technical Indicators Signal Strength
The Relative Strength Index (RSI) on the 4-hour and daily charts suggests continued bullish momentum. This technical indicator aligns with silver’s upward trajectory, reinforcing the potential for a breakout if the metal sustains its current trend.
While the 100-day EMA has successfully provided support around $30.53, silver's failure to breach the $30.97 resistance earlier led to a 1% decline during the Asian session. Stability near the EMA level, however, indicates resilience, with buyers stepping in to defend key support.
Outlook: A Promising Near-Term Trend
Silver’s price trajectory is influenced by a combination of technical support, bullish external factors, and policy-driven optimism. If resistance at $30.97 is decisively broken, the metal could rally toward the $31 level. However, sustained consolidation below this resistance may prompt further corrections, making the 100-day EMA a critical support to monitor.
With industrial demand prospects rising and macroeconomic policies favoring precious metals, silver's near-term outlook appears promising, though traders should watch for potential headwinds from broader market dynamics.
Peter Smith
