Silver (XAG) Forecast: Can Momentum Hold as Safe-Haven Demand Collides with China Trade Risk?

Silver Surges as Safe-Haven Demand Accelerates, But China Remains a Drag

Silver rallied sharply last week, settling at $32.31 with a weekly gain of $2.72 or +9.18%. The move was driven largely by safe-haven flows tied to deepening macro uncertainty, broad U.S. dollar weakness, and a spike in investor unease around global trade. While gold’s historic breakout helped lift silver, the rally continues to face skepticism due to persistent industrial demand concerns, especially out of China.

Gold-Led Rally Boosts Silver

The standout catalyst for silver’s strength was gold’s aggressive move past $3,200, fueled by global risk aversion and renewed capital flows into hard assets. The rapid rotation out of Treasuries and the dollar has increased silver’s appeal as a secondary store of value. Fund flows into precious metals, combined with dollar softness, created a bullish environment for silver despite lingering demand risks on the industrial side.

Demand Risk Looms from China and Tariffs

At the same time, headwinds remain. Silver’s industrial exposure continues to weigh on its outlook, particularly as the U.S.–China trade conflict escalates. The latest round of tit-for-tat tariffs—145% duties from the U.S. and 125% retaliation from Beijing—has added new pressure on manufacturing sentiment.

China, a major consumer of silver for electronics, solar, and other applications, is showing signs of weakening demand. Without a turnaround in Chinese factory activity or trade relief, silver’s physical demand base remains vulnerable.

Dollar Weakness and Bond Market Stress Add Support

Broader macro conditions remain constructive for precious metals. The U.S. dollar hit a multi-year low against the Swiss franc and a six-month low versus the yen, while bond markets saw heavy outflows. The 10-year Treasury yield posted its steepest weekly rise in decades, a sign of fading confidence in traditional safe havens. These conditions are pushing capital into tangible assets like silver, reinforcing the bullish tone for now.

Outlook: Bullish Momentum Intact, But Demand Questions Remain

Silver’s +9.18% gain last week marks one of its strongest weekly performances this year, supported by safe-haven buying and macro pressure on the dollar and bonds. However, until there’s evidence of recovery in industrial demand—especially from China—the rally remains vulnerable to profit-taking.

As long as macro stress and gold strength persist, silver has room to extend higher, but sustained upside will require confirmation from the physical demand side. Caution is warranted near current levels.

Technically, despite a volatile trade last week, XAG/USD was able to overcome the weakness and closee on the bullish side of the 52-week moving average at $30.60. This indicator is new support.

More Information in our Economic Calendar.