Silver (XAG) Forecast: Silver Rally Nears $40 as Bullish Momentum Outshines Gold

Silver Surges to 14-Year High, Outshines Gold as Bullish Momentum Builds

Silver (XAG/USD) rallied sharply on Monday, breaking to its highest level since 2011 and outperforming gold by a wide margin. The metal surged early in the session to a peak of $39.13 before settling modestly lower at $38.80, still up $0.40 or 0.99% on the day. Despite some profit-taking, silver’s ability to retain most of its gains reflects strong underlying demand and reinforces the bullish outlook.

Silver Eyes Psychological $40 Barrier

The $40.00 level now looms as the next major upside hurdle, with technical traders targeting the multi-year resistance at $44.00 beyond that. On the downside, support is layered with former lows at $37.23–$37.32 and further cushions at $36.16 and $35.28. The 50-day moving average at $35.10 underpins the medium-term trend.

Silver’s sustained strength today stands in contrast to the action in gold, which failed to hold earlier gains triggered by fresh geopolitical risk.

Gold Stumbles After Breakout Attempt

Gold (XAU/USD) briefly spiked to a three-week high above $3365.92 on safe-haven flows following President Trump’s announcement of sweeping 30% tariffs on EU and Mexican imports. However, the metal lost momentum as the initial rally was met with profit-taking and a lack of institutional follow-through. Gold ultimately retreated to test support at $3347.97, with further backing near the 50-day average at $3326.20.

Unlike silver, gold’s reversal underscores market caution amid headline-driven price moves. The geopolitical spark from tariff news faded after both the EU and Mexico signaled restraint, opting for negotiation over retaliation in the short term. Without escalation or fresh catalysts, gold’s rally stalled, revealing fragility in upside conviction.

Diverging Technicals Reflect Market Tone

The contrasting price behavior between silver and gold highlights a divergence in market conviction. Silver’s rally appears to be structurally stronger, underpinned by bullish technicals and follow-through buying. Gold’s failure to maintain breakout levels, meanwhile, suggests a rally built on reactive flows rather than sustained investor positioning.

Market Outlook: Silver Poised to Challenge $40

Looking ahead, silver appears well-positioned to test the $40.00 threshold, especially if upcoming inflation data or Fed commentary further weakens the U.S. dollar.

While gold remains in a broader uptrend, today’s pullback signals that traders may demand clearer catalysts before committing to fresh longs.

Silver’s outperformance suggests rotational interest in the metal, with bullish sentiment intact barring a drop below key support at $37.23.

More Information in our Economic Calendar.