SLV silver price to sustain uptrend as gold peaks

iShares Silver Trust (SLV), an ETF that tracks physical silver price, hit a 14-year high at the start of the week before the observed profit-taking. Even with the corrective pullback, SLV price has held steady above the previously strong resistance level of $33.75 amid heightened demand for the precious metal. 

Beyond gold’s spillover effect, silver’s fundamentals are strong. Heightened demand for industrial use, jewelry, and investment is set to sustain the current uptrend. 

Heightened silver demand is beyond gold’s spillover

At the beginning of the week, silver price extended its gains to a fresh 14-year high as investors shift from the more expensive gold. Notably, gold price has rallied by over 25% year-to-date as investors seek to secure their investments amid the persistent geopolitical and economic uncertainties. 

Gold tends to be a more suitable safe-haven asset compared to its less lustrous cousin, silver. However, seeing that the latter is less expensive, it is increasingly becoming the preferred alternative. Silver has outperformed gold in recent sessions, rising by about 4% in one month compared to gold’s 3% decline over the same period.  

With the fresh tariff jitters, SLV price has held steady above the previously strong resistance zone of $33.75. The rallying of precious metals in recent months, led by gold, has largely been fueled by concerns over the impact of Trump’s aggressive tariffs on the global economy. More specifically, gold’s historic rally has had a spillover effect on other precious metals, including silver and platinum.

Silver’s growing demand for jewelry and investment is set to support its uptrend in the short-to-medium term. Indeed, Citigroup has adjusted its three-month outlook of silver price from $38 to $40. Similarly, it now expects the precious metal to average at $43 in its 6-12 month forecast. 

According to the bank, silver will likely continue to outperform gold as the bullion’s uptrend may have peaked. In its statement, Citigroup noted, “The recent silver price rally is not just a catch-up trade to gold but also a reflection of strong silver fundamentals”. 

In addition to its investment demand, silver’s industrial uses are expected to fuel its current uptrend. It is particularly important in the manufacturing of solar panels and electric vehicles as the world adopts green energy. This demand, coupled with optimism over China’s economic health, will likely maintain SLV price above $34 in the short term.       

SLV  price technical analysis

On Wednesday, iShares Silver Trust (SLV) price reversed some of the losses recorded in the previous session as heightened silver demand bolsters prices. Even with the corrective pullback, SLV price has held steady above the previously steady resistance zone of $33.75. 

In the near term, the range between that resistance-turn-support zone and the upper level of $34.50 will be worth watching. If successful at breaking out of that range, the bulls will be eyeing the psychological zone of $35.00.