Silver (XAG) Forecast: 13-Year High Spurs Silver Rally as Bulls Target $40

Silver Rallies to 13-Year High as Supply Deficit and Industrial Demand Drive Gains

Silver prices surged on Friday, extending a powerful breakout above the $35.40 level and hitting a fresh 13-year high at $36.16. Traders continue to pour into the metal, betting on structural strength in supply-demand fundamentals and looking ahead to a pivotal U.S. non-farm payrolls (NFP) report that could steer short-term momentum.

The metal’s move has outpaced gold in recent sessions, as investors rotate toward silver and platinum. Gold’s struggle to gain traction at current levels has prompted some traders to seek value elsewhere, with silver now viewed as a catch-up play.

At 12:14 GMT, XAGUSD is trading $36.09, up $0.43 or +1.21%.

Gold-Silver Ratio Points to Rebalancing

A sharp drop in the gold-silver ratio—from 105 in April to around 94—indicates silver is gaining relative value. This metric, which shows how many ounces of silver are needed to buy an ounce of gold, has historically served as a barometer for relative strength. With the ratio breaking below 100, some analysts suggest ratio-driven trades are pushing more capital into silver.

Analysts like Rhona O’Connell at StoneX believe this shift is evidence of silver “closing its performance gap with gold,” particularly as its bullish underpinnings become harder to ignore.

Industrial Demand Fuels Bullish Case

More than half of global silver demand comes from industrial use, and that demand remains strong. Despite broader industrial slowdowns, silver continues to benefit from growth in solar panel manufacturing and electrification technologies. The Silver Institute confirms industrial use remains robust, helping explain the 24% price surge in 2025.

UBS analyst Giovanni Staunovo noted that weaker U.S. economic data—while pressuring the dollar—is supporting expectations of rate cuts, which in turn strengthens the outlook for industrial metals like silver.

Supply Deficit Entering Fifth Year

Silver is now facing its fifth consecutive year of a structural supply deficit. Although the shortfall is expected to narrow by 21% this year, limited new production—since most silver is a by-product of mining other metals—means tight supply conditions are likely to persist. Analysts believe this supports a long-term bullish thesis for silver, regardless of short-term retracements.

Nitesh Shah of WisdomTree emphasized that elevated prices may not bring in enough new supply, potentially keeping the market tight through year-end.

What’s Next? Eyes on NFP and $37 Resistance

Looking ahead, the market is watching today’s U.S. payrolls data closely. A stronger-than-expected report could prompt traders to eye the $37.00 level, while a weaker print might trigger profit-taking and a retest of prior support at $35.40 or even $34.87.

Silver’s technical breakout, combined with strong industrial demand and persistent supply shortages, puts bulls in control for now. Unless a hot jobs number derails Fed rate cut bets, silver appears poised to continue its upward push—possibly toward $40 in the medium term.

More Information in our Economic Calendar.