Silver (XAG) Forecast: Dollar Retreat and Tariff Tensions Spark Rally Hopes

Dollar Weakness and Trade Risks Support Silver

Silver began the week with modest gains, stabilizing above its 50-day moving average at $32.55—a level now serving as short-term support. The metal also finds backing from a key Fibonacci retracement at $32.19.

As the U.S. dollar breaks to three-year lows and gold surges past $3,397, silver is catching renewed attention from traders who see it as undervalued relative to gold. The ongoing dollar retreat, driven by political pressure on the Fed and global trade tensions, is fueling fresh interest in precious metals.

At 11:11 GMT, XAG/USD is trading $32.91, up $0.39 or +1.20%.

Gold-to-Silver Ratio Signals Deep Undervaluation

The gold-to-silver ratio now stands above 100, signaling silver’s steep discount to gold. According to MarketWatch, analysts note this level has historically coincided with major upside moves in silver.

During the early COVID panic, the ratio hit similar extremes before silver outperformed gold three-to-one in the months that followed. Ratios above 100 are rare—seen only during periods like the Great Depression and briefly in the 1990s—and tend to revert toward the long-term mean near 70.

Tariffs Cloud Industrial Demand, but Opportunity Builds

President Trump’s new tariff policy—including a 10% baseline duty and up to 145% for Chinese imports—has raised concerns about recession risks and a drag on industrial demand.

MarketWatch reports this has hurt silver more than gold, given its dual role as both a monetary and industrial metal. Yet the industrial headwind may already be priced in. Analysts say the spike in store-of-value demand could soon take the lead, especially as geopolitical uncertainty drives broader capital flows into hard assets.

Physical Deficit Tightens the Bullish Setup

Silver supply remains structurally tight. The Silver Institute, cited by MarketWatch, expects global silver supply to reach 1.031 billion ounces in 2025, against projected demand of 1.148 billion ounces.

That would mark a fifth straight year of deficit, strengthening the long-term case for price gains. With inventories thinning and macro pressures building, silver’s setup grows increasingly bullish.

Outlook: Breakout Above $33.11 Could Trigger Acceleration

Technically, silver bulls are watching the $33.11 resistance level. A breakout would expose a clean path to the $34.59–$34.87 range. As MarketWatch highlights, silver may now present a “vastly better investment opportunity” than gold, with the gold-to-silver ratio poised to snap back.

With a weaker dollar, limited overhead resistance, and structural deficits in play, silver remains well-positioned for upside as long as support near $32.19 holds. Traders are likely to favor buying strength and dips alike.

More Information in our Economic Calendar.