Mirae Asset Sees Silver Trading $58-$61 Amid Dollar Strength, High Yields

Mirae Asset Forecasts Silver Prices Amid Dollar Strength and Rising Yields

Silver is expected to trade between $58 and $61 in the near term as a stronger dollar and elevated yields weigh on the precious metal.

Current Market Dynamics

As of October 8, silver prices fell to $58.50, marking a two-month low, primarily due to a surge in oil prices and a firmer US dollar. The precious metal has experienced a significant decline of nearly 18% year-to-date, reflecting broader market pressures. The recent spike in oil prices, coupled with geopolitical tensions, has further complicated the outlook for silver.

Geopolitical Factors and Oil Prices

Geopolitical tensions, particularly concerning Iran, have contributed to fluctuations in oil prices, which in turn impact silver. Following discussions indicating a potential delay in military action against Iran, Brent crude prices saw volatility, ultimately hovering around $103.50. The interplay between oil prices and silver is critical, as rising energy costs can lead to increased inflationary pressures, further influencing investor sentiment towards precious metals.

ETF Holdings and Inventory Trends

Silver exchange-traded fund (ETF) holdings have remained uninspiring, currently at 801.92 million ounces, down 7.71% year-to-date. Despite a slight recovery from a cycle low, the overall trend suggests a lack of robust demand. Additionally, registered COMEX silver inventory has surged to an eight-month high of 102.81 million ounces, indicating a potential oversupply in the market. This inventory build-up, coupled with subdued ETF inflows, poses further challenges for silver prices.

Interest Rates and Dollar Strength

The US dollar index remains strong, trading at 102.15, near its highest level since April 2024. This strength is attributed to high energy prices and safe-haven flows amid political uncertainties in Europe. The Federal Reserve’s interest rate decisions also play a crucial role in shaping silver’s trajectory. With the probability of a rate hike at the upcoming FOMC meeting dropping to 20%, markets are recalibrating expectations, which could influence silver’s appeal as an investment.

Outlook and Key Resistance Levels

Looking ahead, silver is expected to trade within the $58 to $61 range, with interim resistance at $60 and a major hurdle at $64.50. A decisive breach below the $58.60 support level could lead to further declines, potentially targeting $54.50. Investors are advised to remain cautious, as the market remains vulnerable to external shocks, particularly from geopolitical developments and macroeconomic data releases.

Key Highlights

• Silver prices have fallen to $58.50, marking a two-month low.
• ETF holdings are down 7.71% year-to-date, indicating weak demand.
• US dollar strength is impacting silver prices amid rising geopolitical tensions.
• Key resistance levels for silver are at $60 and $64.50.
• A breach below $58.60 could signal further declines towards $54.50.

Investor Note: Investors should closely monitor macroeconomic indicators and geopolitical developments, as these factors will significantly influence silver’s price trajectory in the coming weeks.