Silver (XAG) Forecast: Can Bulls Push Through $50 and Start a New Leg Higher?

Silver Charges Toward $50 as Tight Supply and Gold Momentum Boost Bulls

Silver surged Thursday, outperforming gold and challenging long-standing resistance levels at $50.00. Spot prices hit $50.00—just above the multi-year high of $49.81. While gold’s rally shows signs of exhaustion near record highs, silver’s strength appears more fundamentally grounded, with fewer signs of speculative excess and firmer demand-supply support.

At 12:34 GMT, XAG/USD is trading $50.00, up $1.12 or +2.30%.

Tight Physical Market Adds Weight to the Rally

Silver has gained over 70% this year, driven by solid underlying fundamentals. Unlike prior rallies led by leveraged speculative flows, current positioning shows only modestly higher net longs. According to independent analyst Ross Norman, this suggests the move is not built on froth but rather grounded in sustained demand, tightening supply, and spillover interest from gold.

Traders also cite structural deficits in the spot market and growing investor demand—particularly in ETFs and physical holdings—as key drivers of this rally. Market participants are watching closely to see if silver can hold above the $49.81-$50.00 zone, a level that historically triggers selling pressure. A breakout could ignite further upside.

Gold’s Pause Keeps Silver Bulls in Check—for Now

Gold traded above $4,000 an ounce on Thursday, supported by geopolitical tensions, strong central bank buying, and Fed rate cut bets. However, with prices stalling near the $4,059.35 record and showing early signs of exhaustion, some traders fear a pullback could weigh on silver if risk sentiment improves.

The U.S. Dollar Index remains strong near a two-month high, supported by weakness in the euro and yen. This strength continues to pressure dollar-priced metals and may limit silver’s upside if foreign demand softens. Still, geopolitical uncertainty—especially in the Middle East and Europe—continues to provide a backstop for precious metals.

Federal Reserve Expectations Offer Underlying Support

Federal Reserve minutes released Wednesday revealed growing concern over the U.S. labor market, prompting market bets on a 25-basis-point cut at upcoming meetings. A dovish Fed outlook generally favors precious metals, particularly non-yielding assets like silver and gold. But inflation concerns remain, and if expectations around cuts fade, silver could see short-term cooling.

Fiscal instability in France and Japan, as well as the U.S. government shutdown, are also feeding into broader risk hedging across metals. UBS noted that mounting fiscal pressures and political risks are keeping investor demand elevated.

Silver Forecast: Watch for Breakout or Exhaustion Near $50

Silver bulls retain control, but the $50.00 level is a technical and psychological barrier that may attract sellers. If the metal can clear and sustain above $50.00, the move could trigger a fresh momentum phase supported by supply constraints and gold spillover. A failure here, particularly if gold reverses, could lead to consolidation back toward the mid-$40s.

Traders should monitor gold’s behavior around $4,000 and dollar strength for cues. With physical tightness and investor interest holding firm, silver remains biased to the upside—but chasing highs requires precision.

More Information in our Economic Calendar.