A shift in risk sentiment coupled with a weak U.S. dollar, and growing expectations that the Federal Reserve will cut interest rates in the second half of the year, is driving silver prices higher.
Silver gained more than $3 in March, marking its best monthly performance since December 2020.
Silver is rising even better than gold. The gold-silver ratio has fallen to a two-month low, currently trading around 81.73.
The fall of the ratio below 86 points last week was a significant move that broke the support of the trend line.
Looking at silver's technical outlook, it may only be a matter of time before the precious metal rises above $24.50 an ounce, breaking a two-year downward trend.
Silver could rise to $25 or even $27 an ounce.
Looking at the fundamentals of the precious metal, silver is beneficial as a safe-haven asset.
The easing of fears about the global banking crisis inspires some optimism in the global economy, but supports the metal as an industrial one.
If the banking crisis resolves, there is another dormant problem that will support the demand for safe-haven precious metals, and that is the rapidly approaching debt ceiling.
Silver is also profitable as a monetary metal, as lower-than-expected inflation data reinforces expectations that the Federal Reserve will stop raising interest rates.
According to the CME FedWatch Tool, there is a 50% chance that the Fed will keep rates at the same level after the May meeting. And everyone is expecting the Fed to cut rates in the second half of the year.
However, even though silver still has significant bullish support, do not forget that there is a possibility of some profit-taking, which will contribute to some correction.
Also, the precious metal continues to benefit from robust physical demand, especially from China.
