Silver Price Forecast: XAG/USD hovers around $66.50 near record highs
- Silver price rises as markets increasingly price in two US Federal Reserve rate cuts in 2026.
- Fed Governor Christopher Waller said US borrowing costs should be up to 1% lower.
- The grey metal hit record highs, with persistent supply deficits expected to push prices higher into 2026.
Silver price (XAG/USD) trades near $66.50 per troy ounce during European hours on Thursday, hovering around an all-time high of $66.89, recorded on Wednesday. Precious metal prices, including Silver, climb as markets increasingly price in two US Federal Reserve rate cuts in 2026 following dovish remarks from Fed Governor Christopher Waller, a leading contender for Fed chair.
Fed Governor Christopher Waller said at a CNBC forum that the United States (US) borrowing costs should be up to one percentage point lower. Waller warned that job growth has slowed to near zero and advocated for measured rate cuts next year to support employment. However, he noted that with inflation still elevated, there is no urgency, adding that policymakers can gradually move rates toward neutral.
November’s US labor data reinforced signs of a cooling job market, with unemployment rising to 4.6%, the highest since 2021. Although November payrolls increased more than expected, they failed to offset October’s sharp slowdown fully. Traders now await the US Consumer Price Index (CPI) report later in the day for further clues on inflation trends.
The grey metal is supported by tightening inventories and strong retail and industrial demand, especially from the rapidly expanding solar, electric vehicle, and data center sectors. Silver prices reached record highs in late 2025, and the market’s fifth straight annual deficit is expected to persist, driving prices higher into 2026.
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
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
