Silver (XAG/USD) is stable around $38.00 after hitting a 14-year high earlier this week. The metal is showing positive signs in both daily and weekly charts, supported by an ascending channel pattern and bullish indicators like RSI and ADX. On Friday, Silver is priced at $38.25, down from a peak of $39.13 earlier this week. It’s staying above important short-term moving averages, such as the 21-day EMA at $37.05 and the 50-day EMA at $35.82, which help support the price. Though it is currently trading below the $38.50-$39.00 resistance zone, rising indicators like RSI and ADX suggest renewed buying interest might be coming. If it drops below $37.00, prices could fall further, with support at $35.50 and $34.50. Conversely, if it breaks above $39.13, we could see new buying and a test of the $40.00 level. Silver is considered a safe-haven asset. Its price is affected by geopolitical stability, interest rates, and the value of the US Dollar. Industrial use, especially in electronics and solar energy, also significantly affects Silver prices. Price trends in Silver often follow Gold, and the Gold/Silver ratio helps indicate their relative values. We believe the current technical setup points to more upward movement. Derivative traders might consider buying call options to take advantage of a possible breakout above the recent peak. Sustained movement past this level could bring the important $40.00 psychological barrier into focus. The fundamental outlook supports this positive view, as industrial demand is expected to reach new highs. The Silver Institute predicts global industrial demand will rise by 9% in 2024, largely driven by the photovoltaic and electronics industries. This strong demand provides solid support for prices and may limit any significant pullbacks. As we keep an eye on the impacts of monetary policy, the potential for future interest rate cuts later this year is promising. Current market data from the CME FedWatch tool suggests a strong chance that the Federal Reserve will keep rates steady soon but anticipates cuts by the fourth quarter. This expectation should attract more investment into non-yielding assets. We also see value in Silver compared to Gold. The Gold-to-Silver ratio has decreased from recent highs over 90 but is still high at around 78, above its long-term historical average. This indicates Silver may have further potential to rise compared to Gold if precious metal prices continue to grow. Given the current trading below resistance, we recommend careful risk management. A drop below $37.00 could signal trouble. Traders might use protective put options to shield long positions from sudden declines. However, with prices currently at multi-year highs, attention should also be paid to the 2011 peak near $50.00 as a historical reference.

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