Silver Price Forecast: XAG/USD jumps above $81.50 on strong industrial demand

Silver price climbs to around $81.50 in Monday’s early Asian session, adding 1.45% on the day.
Demand from rising industrial applications and investment underpins the Silver price.
The US and Iran rejected each other’s latest peace proposals to end the 10-week conflict.

Lallalit Srijandorn FXStreet

Silver price (XAG/USD) rises to near $81.50 during the early Asian trading hours on Monday. The white metal extends the rally amid rising demand from industrial applications. Traders will closely monitor the developments surrounding the US-Iran peace deal for fresh impetus.

Silver’s demand is driven by photovoltaics, electromobility, semiconductors, and AI infrastructure. Several analysts expect industrial demand to exceed supply in 2026 as well. Additionally, investment demand also remains robust.

According to the latest World Silver Survey data, global physical investment demand in 2025/early 2026 was at a multi-year high. This was mostly due to Indian investors and a significant change in European precious metals trading toward silver.

On the other hand, concerns that major central banks might maintain their restrictive course longer in light of rising energy prices could weigh on the precious metals. It’s worth noting that Silver is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.

US President Donald Trump rejected new Iran peace proposals to end the war as "totally unacceptable." Tasnim news agency said Tehran's proposal included an immediate end to the war on all fronts, a halt to a US naval blockade, and guarantees of no further attacks on Iran.

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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