Silver (XAG) Forecast: Speculators Exit as Silver Dropping Sparks New Value Hunt

Silver Futures: The Speculative Party Is Over, Now Comes the Value Hunt

Spot silver is trading lower on Tuesday, dragged down by weak gold prices and a stronger US dollar. Silver is also trading on the weak side of the 50-day moving average, which opens the door to further downside pressure. With the break of the 50-day MA, the 200-day moving average at $51.65 is now on the radar.

Gold Has the Central Banks, Silver Lost Its Story

Unlike gold, which has the support of major central banks if the reports are still true, silver was supported throughout 2025 by reports of a supply deficit and strong industrial demand. Both factors contributed to a steady climb, understandably. That was until the overleveraged speculators took control and crashed the party. The exchange raised futures margins and suddenly some began to question the whole storage deficit and industrial demand argument.

Risk-Off Has Changed the Rules

Now traders are dealing with an uncertain Fed and a risk-off situation across all speculative markets, which points toward lower prices and a return to more traditional fundamentals. Instead of looking to come in every day to take out offers, investors are now hunting value.

Long-term investors have seen what silver can do after a 46-year wait, so they are the patient ones. The short-term guys have to think now with little momentum to the upside, so they have lost interest. But they will probably be back once the market finds value and stabilizes.

It is just a different game right now than it was during that explosive December and January time period. The rules have changed but good traders adapt, so be patient.

Deutsche Bank Drops a Number, But Don’t Read Too Much Into It

CNBC covered it so I thought I would mention it. According to CNBC, Deutsche Bank analysts said in a note published Tuesday that silver was trading $7 below its real adjusted price in 1790, after prices fell in the morning.

First of all, it is not a forecast. It is just a statement with historical context. It does not tell us where silver should trade tomorrow or next week. It is telling us that silver is at a discount to long-term purchasing power history. It could be attractive to dip buyers or to computer traders searching for historical value anomalies.

One More Piece of the Value Puzzle

Essentially it supports my idea of value hunting. It is restating what I wrote earlier about traders searching for value. It is just another piece of the puzzle.

Silver Is a Trader’s Asset, Not a Buy and Hold

For longer-term buyers, the story is a little different. It blows up the idea of silver being a hedge against inflation. However, it does not mean it is worthless. We are still going to see industrial and monetary policy-driven price spikes. It is probably better for timing potentially volatility-driven spikes, but not really worth holding for the long run because it is not a compounding asset. Translation: it is a good asset if you can catch the cyclical moves.

More Information in our Economic Calendar.