Silver (XAG) Forecast: Silver Market Stalls Near Highs After ETF Demand Drives Rally

Silver Holds Near Record Highs — But Is This Pause Just Dip-Buying Fuel?

Spot silver is a touch softer to start the week, stuck inside Friday’s range and telling you the market’s catching its breath after a monster run. Traders aren’t pressing the downside, but they’re not chasing it above $59.34 either. That hesitation matters — especially with last week’s low at $56.46 and the short-term pivot at $53.99 sitting below as the next decision zones.

At 14:29 GMT, XAGUSD is trading $58.31, down $0.05 or -0.08%.

ETF Buyers Add Real Weight to the Move

The big story under the surface is ETF demand. In the first four days of December, silver-backed ETFs pulled in more metal than any full week since July — a strong grab for exposure even with prices sitting near record highs. Those inflows physically tighten supply, and when they cluster during a consolidation, they usually signal accumulation rather than profit-taking. Strategists are already warning that strong ETF buying in a tight market can accelerate short squeezes. That’s worth keeping in mind if price continues to coil under $59.

Industrial Demand Isn’t Letting Up

Traders don’t need reminding that silver isn’t just a monetary metal. Solar manufacturing now eats roughly 20% of annual output, and renewable build-outs aren’t slowing. The photovoltaic sector alone is set to take record tonnage through 2025. None of that fixes itself quickly. If anything, industrial buyers tend to step in on dips, and that steady pull on physical metal helps explain why sellers haven’t been able to create real momentum on the downside.

Supply Still Struggling to Keep Pace

On the supply side, miners are dealing with aging reserves and higher extraction costs, and new projects take years to meaningfully add output. The market is staring at what could be a fourth straight annual deficit. Above-ground inventories sit at multi-year lows. Bottom line: when supply is tight, even modest upticks in demand hit harder. That’s part of why silver’s doubled this year — the market finally started pricing in the squeeze.

A Supportive Policy Backdrop

Loose monetary conditions remain a tailwind. Silver tends to outperform during easing cycles because it can trade both as an industrial input and a store of value. If central banks stay accommodative while fiscal stimulus remains active, that mixed profile keeps buyers engaged. And with geopolitical risks still elevated, some money is rotating into silver as a cheaper risk hedge than gold.

So What’s the Near-Term Read?

The pullback looks more like a pause than a reversal, with buyers stepping in on weakness and ETF demand adding real support. A break above $59.34 would open fresh air, although traders may want to see volume confirm it. If sellers manage a deeper dip, $56.46 and $53.99 should be the first spots where buyers test their conviction.

More Information in our Economic Calendar.