Silver (XAG) Forecast: Silver Rally Hits Records as Soft Data Fuels Bullish Price Prediction

Silver Rips to Fresh Highs as Fed Cut and Soft Data Light a Fire Under the Market

Spot Silver didn’t just firm up last week — it launched. XAGUSD closed at $67.17, up 8.48%, after printing a new all-time high at $67.46. It’s been one of the strongest commodity runs of the year, and the tape finally has traders asking whether momentum alone can keep this thing moving or if the market needs a breather after a three-week, 25% surge.

Fed Eases Again — and Metals Take the Hint

The rally picked up speed after the Fed’s 25 bp cut on December 10, the third straight move lower, bringing the funds rate to 3.5–3.75%. The three dissenting votes showed the committee isn’t aligned, but for metals the takeaway was clean: the Fed is leaning toward growth concerns, and that tends to lift the entire precious-metals complex.

Powell called it a “challenging situation,” and traders took that as confirmation that the bar for further cuts may be lower than the Fed wants to admit. That set the stage for a busy week of data.

Soft Jobs, Softer CPI — and a Dollar That Lost Its Grip

Tuesday’s delayed NFP report showed just 64,000 jobs added. Not catastrophic, but it underscored how hiring has flatlined since spring. Unemployment held at 4.6%, and wages grew a modest 0.3%. The shutdown-related delay added noise, but the trend spoke for itself: the labor market is cooling.

Then came the real catalyst. CPI printed 2.7% vs. 3.1% expected, with core at 2.6%, the slowest since early 2021. Methodology questions surfaced, but traders didn’t get bogged down — they sold dollars. The DXY flushed to 97.869 before settling at 98.718, giving silver all the room it needed. U.S. 10-year yields eased to 4.149% on the week, down roughly 3.7 bps or -0.88%, keeping the dollar on the back foot and steadying the bid in metals.

Supply Deficits Keep the Market Tight

Beyond the macro push, the physical market remains stretched. 2025 marks the fifth straight supply deficit, with this year’s shortfall near 117M oz. Mine output is pinned near 813M oz, while industrial demand keeps heating up — more than 200M oz for solar alone, plus growing pull from EVs and AI hardware. Substitution just isn’t an option for the conductivity required.

ETF flows continue to reinforce the move, helping drive a 120%+ year-to-date gain while London inventories sit at multi-year lows.

Outlook: Thin Holiday Liquidity Could Get Loud

Next week’s holiday trade could exaggerate every move. Silver’s stretched, and a dollar pop could spark a shakeout. But the bigger picture still favors buyers. Deficits aren’t easing, industrial demand isn’t price-sensitive, and above-ground stocks remain tight.

Bottom line: $70 looks more like a level the market wants to test than a ceiling. Early 2026 still leans bullish, with January data set to decide whether this rally has another leg.

More Information in our Economic Calendar.