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

• Silver price extends its upside around $28.50 in Thursday's early European session. 
• Rising industrial demand and ongoing tensions in the Middle East benefit the white metal. 
• The higher chance that the Fed will delay its easing cycle might cap the upside of the silver price.

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

The Silver Institute released its annual World Silver Survey on Wednesday, showing that industrial demand in the silver market is expected to hit another record high this year, climbing 9% to 710.9 million ounces. The rising demand is driven by silver demand for Photovoltaic (PV) solar panels. Furthermore, the ongoing tensions in the Middle East, particularly between Iran and Israel, might further fuel the demand for silver. ANZ commodity analysts said that silver still has significant potential, even after hitting solid resistance at $29.90 last week.

On the other hand, the growing speculation that the Federal Reserve (Fed) will delay its easing cycle might cap the upside of silver price. Fed Cleveland President Loretta Mester said on Wednesday that inflation is higher than anticipated and the Fed needs more confidence in its trajectory. Earlier this week, Fed Chair Jerome Powell emphasized that he will wait for more evidence to gain confidence that inflation is headed toward the central bank's 2% goal before lowering borrowing costs. It's worth noting that the higher-for-longer US rate narrative might dampen demand for white metal, a non-interest-bearing asset.