Silver Price Forecast: XAG/USD jumps above $92.50 on safe-haven demand
- Silver price edges higher to around $92.65 in Monday’s Asian session.
- Safe-haven demand and rising industrial demand boost the Silver price.
- Fed rate cut calls get pushed back after the upbeat US economic data.
Silver price (XAG/USD) trades in positive territory near $92.65 during the Asian trading hours on Monday. The white metal is set to hit a fresh record high as US President Donald Trump’s tariff threats boost the safe-haven flows. The US markets are closed in observance of the Martin Luther King Jr. Day holiday on Monday.
Trump said on Saturday that he would slap an additional 10% import tariff on eight European nations, including Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the United Kingdom (UK), that have opposed his plan to take Greenland, per Bloomberg.
European leaders are set to hold an emergency meeting in the coming days as they explore possible counter-measures. Renewed fears of retaliation from Europe, which could lead to a trade war, provide some support to the precious metal.
Additionally, robust industrial demand, especially in solar panels, electric vehicles (EVs) and AI-related infrastructure, might contribute to Silver’s upside. Industrial applications account for over half of global silver demand and continue to hit record levels.
On the other hand, growing expectations that the US Federal Reserve (Fed) will pause its monetary-easing campaign later this month could lift the US Dollar (USD) and create a headwind for the USD-denominated commodity price. Morgan Stanley analysts updated their forecast for 2026, forecasting one rate reduction in June and another in September, instead of in January and April.
Silver FAQs
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.
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.
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.
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.
