Silver Price Forecast: XAG/USD gains momentum above $28.00 on rising industrial demand

• The price of Silver extends its upward trend around $28.50 in the early stages of the European session on Thursday.
• The increase in industrial demand and continued tensions in the Middle East benefit the white metal.
• The increased likelihood of the Fed delaying its easing cycle could limit the rise in the price of Silver.

The price of Silver (XAG/USD) gains momentum near $28.50 on Thursday during the early European session. The white metal's rally is bolstered by rising industrial demand and safe haven flows amid ongoing geopolitical tensions in the Middle East.

The Silver Institute (The Silver Institute) published its annual World Plata Survey report on Wednesday, according to which Industrial demand for Silver is expected to hit a new record this year, with an increase of 9% to 710.9 million ounces. The increase in demand is due to the demand for Silver for photovoltaic solar panels. Furthermore, current tensions in the Middle East, especially between Iran and Israel, could further drive demand for Silver. ANZ commodity analysts say Silver continues to have significant upside, even after hitting solid resistance at $29.90 last week.

On the other hand, growing speculation that the Federal Reserve (Fed) will delay its easing cycle could limit the rise in the price of Silver. Cleveland Fed Chair Loretta Mester said Wednesday that inflation is higher than expected and the Fed needs more confidence in its path. Earlier this week, Fed Chair Jerome Powell stressed that he will wait for more evidence to gain confidence that inflation is heading toward the central bank's 2% target before reducing borrowing costs. It should be noted that the talk of higher US interest rates for longer could dampen demand for the white metal, a non-interest-bearing asset.