On Monday (August 26th), the spot silver market performed strongly, with silver prices rising rapidly in the short term during the European session, successfully breaking through the $30/ounce mark. This is the first time since mid July that silver has returned to this critical psychological level, indicating a gradual increase in market confidence in the rebound of silver prices. As of 15:47 Beijing time, spot silver was reported at $30.032 per ounce.

This upward trend has been driven by multiple factors, firstly the expectation of global central banks cutting interest rates, especially against the backdrop of a soft landing in the US economy. The market's expectations for the recovery of the manufacturing industry have increased, and the recovery of industrial demand has become a key factor supporting silver prices. In addition, with the continued global easing policies, the monetary properties of precious metals have been further strengthened, laying the foundation for the sustained rise in silver prices.

Market Fundamental Analysis

The price of silver has shown a strong upward trend recently, mainly due to the recovery of industrial demand. Zhengxin Futures pointed out that with the gradual recovery of the global manufacturing industry, especially driven by the interest rate cut cycle, industrial demand will continue to be an important driving force for the rise of silver prices.

Specifically, with the alternating increase in gold holdings by the central banks of India and China, the demand for precious metals in the market has steadily increased. Although gold is often seen as a more stable safe haven asset, the dual nature of silver (being both an industrial metal and a precious metal) gives it greater upside potential in the current environment. As the two party elections in the United States approach, the expectation of fiscal easing and inflationary policies further strengthens the upward logic of silver.

Technical analysis

From a technical perspective, the continued bullish sentiment in the market for spot silver has been further confirmed after breaking through $30 per ounce. On the 4-hour chart, silver prices have shown strong performance supported by the 50 cycle exponential moving average (EMA), indicating that there is still room for upward movement in the short term.

According to analysis, the next target for silver is $31.00 per ounce. If the silver price can break through this barrier, the possibility of further rising to $36.06 per ounce will increase significantly. However, if the silver price falls below $29.30 per ounce, it may break the current bullish trend and enter a bearish state.

Transaction volume and open interest contract data

According to the latest data from the Chicago Mercantile Exchange (CME), silver futures saw a significant increase in trading volume on August 22, reaching 105481 lots, an increase of 39255 lots from the previous trading day. Meanwhile, the number of open contracts slightly decreased to 146017 lots. This data indicates that market activity has increased and investors' attention to silver is growing.

Institutional and analyst perspectives

Zhengxin Futures suggests that the current market should adopt a high sell low buy strategy for Baiyin to cope with short-term volatility. The institution also emphasized that the medium to long term space for silver is still huge, and short-term adjustments provide investors with good entry opportunities.

In addition, Jacob Diaz, Chief Financial Officer of Genesis Gold Group, pointed out that with the increasing expectation of the depreciation of the US dollar, the attractiveness of silver as a safe haven asset will further increase. Despite the high volatility of silver, holding physical silver remains an effective way to protect wealth from currency depreciation in the long run.

In summary, the strong performance of the spot silver market on Monday, breaking through the $30/ounce mark, indicates the market's optimistic expectations for future trends. Although there may be fluctuations in the short term, with the recovery of industrial demand and the easing of global economic policies, there is still ample room for silver prices to rise in the medium to long term. Investors should closely monitor market dynamics and adjust their trading strategies reasonably to cope with possible market changes in the future.