Silver Price Forecast: XAG/USD aims to stabilize above $31 amid firm safe-haven bid

• Silver price soars to near $31.40 on heightened geopolitical tensions.
• Russia warned the UK to strike with intercontinental ballistic missiles that have a range of several thousand kilometers.
• Traders lean towards the option of an interest rate cut by the Fed in December.

Silver price (XAG/USD) strives to establish above $31.00 in Friday's European session. The white metal surges to near $31.40 as demand for safe-haven bets has strengthened after Russia launched intercontinental ballistic missiles with a range of several thousand kilometers on Ukraine's defense facilities in Dnipro.

The move appeared as retaliation given that Ukraine used United States (US) supplied ATACMS weapons and the United Kingdom (UK) provided storm shadow missiles to attack deep in Russia over the week.

Russian President Vladimir Putin has also warned the UK to strike with the same ballistic missile that their defense facility used against Ukraine, PA Media reported. Putin stated that their nation is entitled to use weapons against those nations who supplies weapons to Ukraine.

In response to that, the spokesperson of UK Prime Minister Keir Starmer said, "Only serves to strengthen our resolve and to ensure that Ukraine has what it needs to act in self-defense against Russia's reckless and illegal invasion."

The scenario of heightened geopolitical uncertainty improves the demand for safe-haven assets, such as Silver.

Apart from Silver, the safe-haven appeal of the US Dollar (USD) has also strengthened. The US Dollar Index (DXY), which gauges Greenback's value against six major currencies, posts a fresh two-year high at 108.00.

Meanwhile, investors look for fresh cues about the Federal Reserve's (Fed) likely interest rate action in the December meeting. According to the CME FedWatch tool, there is a 56% chance that the Fed will cut interest rates by 25 basis points (bps) to 4.25%-4.50%.

Silver technical analysis

Silver price delivers a mean-reversion move to near the 20-day Exponential Moving Average (EMA) around $31.40 after declining to near $29.70. The white metal weakened after the breakdown of the horizontal support plotted from the May 21 high of $32.50.

The upward-sloping trendline from the February 29 low of $22.30 will act as key support for the Silver price around $29.50.

The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a sideways trend.

Silver daily chart