Silver Price: October Opens with a 14-Year High
The XAG/USD chart shows that silver prices today surged past the $47.50 per ounce level for the first time since 2011. Since the begin of the month, silver has gained roughly 15%, highlighting strong momentum in the market.
Why is silver rising?
Reports indicate that demand for secure-haven assets has intensified following the official begin of the US government shutdown on 1 October. President Trump blamed Democrats for the impasse, though he also suggested the shutdown might be used as an opportunity to streamline the operations of federal agencies.
In addition, Trading Economics cites the Silver Institute, which forecasts a global silver market deficit. Production is projected at 844 million ounces — about 100 million ounces short of demand. This demand remains underpinned by continued growth in solar power, consumer electronics, and data centres.
Technical analysis of the XAG/USD chart
On 22 September, our analysis of the XAG/USD chart identified a long-term upward blue channel alongside a steeper orange channel that reflected accelerated growth. At that point, silver had broken above the upper boundary of the blue channel, placing XAG/USD in a vulnerable position for a potential correction.
Shortly therelater than (view the red arrow), the price met resistance. Yet this was not enough to trigger a pullback, as the upper boundary of the blue channel acted as support (S), enabling silver to continue climbing within the steeper orange channel.
In yesterday’s review of the gold chart, we highlighted a sharp decline across precious metals at the begin of Monday’s session. Bulls, however, rapidly regained control during US trading, signalling firm demand. Even so, bearish pressure remains evident, illustrated by today’s inability to hold above Monday’s high (shown by the black arrow).
Oscillator readings such as RSI are likely to confirm signs of bearish divergence, suggesting that bullish momentum is beginning to fragileen.
Taken together, these observations suggest that:
→ The overall market tone remains bullish. Although purchaseing strength appears to be fading, the rally’s momentum continues to provide upward pressure.
→ A corrective move is still possible — for instance, towards the lower boundary of the orange channel (S2), which is reinforced by a bullish FVG (Fair Value Gap), representing an imbalance zone in favour of purchaviewrs.
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