XAGUSD - How far will silver go?!On the 4-hour timeframe, silver is above the EMA200 and EMA50 and is moving in its ascending channel. If the correction continues, we can see a demand range. We can buy in that range with an appropriate reward to risk.
Gold demand in China is showing signs of a strong rebound, even as the physical flow of gold from the UK to the United States continues. Meanwhile, analysts at Heraeus Precious Metals have indicated that there is evidence suggesting that the growing demand for silver in the solar industry may have peaked.
Last week, both the Federal Reserve and the European Central Bank acted in line with market expectations. The Federal Reserve decided to keep interest rates unchanged, while the European Central Bank implemented a 25-basis-point rate cut.
Regarding silver, Heraeus analysts questioned whether China could sustain its rapid growth in the solar energy sector. They reported, “The total installed capacity of photovoltaic (PV) panels in China reached 886.66 gigawatts in 2024, marking a 46% increase compared to the previous year.
This 277-gigawatt expansion exceeded industry forecasts and surpassed China’s own 2024 capacity projections by 17 gigawatts. However, while this growth is remarkable, it falls short of the record 54% increase seen in 2023, following a 28% rise in 2021. This trend suggests that China may be approaching its peak photovoltaic capacity growth.”
The analysts also noted that, over the past two years, rapid solar energy growth has been driven by unprecedentedly low photovoltaic module prices, largely due to intense competition among manufacturers. They explained, “However, in 2025, polysilicon producers (GCL and Tongwei) have agreed to limit their production, while solar module manufacturers (Jinko, JA Solar, and Canadian Solar) have reached a minimum pricing consensus to restore profitability. This could drive up the price of solar modules, leading to higher capital costs for projects.”
They added, “Projections indicate that 232 million ounces of silver were used in 495 gigawatts of photovoltaic applications in 2024. If installation rates remain steady year-over-year, solar demand for silver could reach a record 270 million ounces in 2025, an increase of 39 million ounces.”
Meanwhile, U.S. Treasury Secretary Scott Bassett announced that the Trump administration is focusing on reducing the yield on 10-year Treasury bonds rather than the Federal Reserve’s short-term interest rate cuts. Over the weekend, Trump remarked that the Federal Open Market Committee’s decision not to cut interest rates was a “good” move, indicating his emphasis on 10-year yields.
This policy could contribute to financial stability and help control inflation. However, some analysts have warned that Trump’s measures, along with spending cuts by his ally Elon Musk, may not have a significant impact, as a large portion of U.S. government expenditures remains allocated to healthcare, social security, and defense.
According to a report by The Wall Street Journal, economists at Morgan Stanley no longer anticipate that the Federal Reserve will lower interest rates in March. They now predict only one rate cut in 2025, expected in June. As Morgan Stanley stated, “The implementation of tariffs earlier than expected is likely to halt the downward inflation trend at a higher level, making any short-term rate cuts impossible.”
