Silver (XAG) Forecast: Silver Rally Extends as Tight Supply Lifts Prices to Record

Silver Rips to Fresh Highs — Buyers Still in Control

Silver didn’t tiptoe higher on Friday. It punched through resistance and kept going, tagging a fresh intraday high at $67.46 and stretching gains to more than 9% above last week’s $61.91 close. The bid feels real. Softer U.S. inflation, rising confidence in Fed cuts, and ongoing physical tightness are lining up, and traders are treating silver as the cleaner upside trade than gold right now.

Gold eased back slightly on a firmer dollar. Silver barely noticed. That tells you where the focus is.

At 19:39 GMT, XAGUSD is trading $67.30, up $1.80 or +2.75%.

Fed Cuts Back on the Table — Real Yields Do the Heavy Lifting

The latest inflation data cooled just enough to keep rate-cut expectations alive. That’s been enough to drag real yields lower, and silver feeds off that setup better than most. It grabs the same monetary bid as gold, then layers industrial demand on top.

Fed funds futures now lean toward at least two cuts by mid-2026, and traders are positioning ahead of that rather than waiting for confirmation. Nobody’s chasing blindly, but there’s a clear sense the downside is getting harder to press while yields stay under pressure. One risk here: if yields bounce hard, some fast money could step aside. For now, that hasn’t shown up.

Physical Market Still Tight — And Not Fixing Itself Anytime Soon

The supply story keeps doing its job. Exchange inventories have been shrinking through the fourth quarter, and estimates still point to a multi-year deficit. That matters, because most silver comes out of base-metal mines. Even at record prices, supply doesn’t respond quickly.

That’s allowed the market to absorb speculative flows without loosening availability. Wholesale premiums keep creeping higher, which tells traders this isn’t just a paper rally. Physical buyers are still paying up. As long as that stays true, dips are likely to find interest.

Industrial Demand Refuses to Blink

Solar, electronics, EV supply chains — they’re all still pulling metal. Fabrication demand has held up better than many expected, even with prices where they are. Production schedules haven’t been cut back meaningfully, and that steady throughput puts a floor under the market when profit-taking hits. This is the piece gold doesn’t have, and it’s a big reason silver keeps outperforming.

ETF Money Quietly Joins the Party

ETF inflowshave flipped from a headwind to a tailwind. After years of net selling, both retail and institutional buyers are coming back. A nearly 128% year-to-date gain has forced underweight funds to react, especially with year-end books in mind. That rotation has added fuel to an already tight market.

Bull Case Still Driving the Trade

Momentum is strong, fundamentals back it up, and the path of least resistance still points higher. Positioning is stretched, and thinner year-end liquidity could mean sharper swings, but traders continue to favor buying weakness — as long as real yields stay soft and physical supply keeps tightening.

More Information in our Economic Calendar.