Silver (XAG) Forecast: Silver Rally Pushes New Highs as Tight Supply Fuels Bullish Outlook

Silver Extends Record Run as Speculation and Supply Tightness Collide

Spot silver surged again in early trade, rising 1.23% to $64.39 per ounce after printing a fresh record high at $64.58. The metal is now on pace for a roughly 10% weekly gain, capping an explosive stretch that has pushed prices to more than double their level from earlier this year. The tone remains aggressive, with buyers continuing to press higher despite growing talk of near-term exhaustion.

At 13:47 GMT, XAGUSD is trading $64.22, up $0.65 or +1.03%.

Industrial Demand and Inventory Draws Anchor the Rally

At the core of silver’s strength is persistent industrial demand paired with shrinking inventories. Consumption tied to electronics, solar applications, and advanced manufacturing continues to absorb supply at a pace that production has struggled to match.

This imbalance has kept the market tight and has reinforced the perception that available material is limited, even at elevated price levels. The inclusion of silver on the U.S. critical minerals list has further reinforced its strategic importance, adding a policy-driven layer of demand to an already stressed supply picture.

Retail Speculation and ETF Inflows Drive Price Acceleration

Beyond fundamentals, speculative behavior has played a central role in accelerating the move. Retail participation has surged, helping fuel strong inflows into silver-backed ETFs.

These flows have amplified upside momentum, creating a feedback loop where rising prices attract fresh buying rather than deterring it. The absence of overhead selling pressure has encouraged traders to stay long, while sidelined participants remain hesitant to fade strength that continues to be rewarded.

Momentum Rules in a Market With No Overhead Supply

From a market structure standpoint, silver is operating without defined resistance. The recent short-term range spans from $56.46 to $64.58, and the trailing moving average has climbed to $60.50, reflecting how quickly price has advanced.

With no clear reference points above, traders are relying on momentum, volume, and order flow to signal when sellers may finally assert control. While conditions suggest the market is stretched, the dominant trend remains intact. Any pullback is more likely to reflect profit-taking and a pause in aggressive buying rather than a broader shift in direction.

Short-Term Outlook: Bullish Bias, Correction Risk Rising

In the near term, silver remains firmly biased to the upside. Tight supply conditions, strong industrial demand, and ongoing speculative interest continue to favor higher prices.

That said, the pace of gains leaves the market vulnerable to a corrective phase as traders lock in profits and wait for better entry levels. Until evidence emerges that demand is faltering or supply pressures are easing, pullbacks are likely to be viewed as temporary resets within a bullish trend rather than the start of a sustained reversal.

More Information in our Economic Calendar.