Silver Is Losing Steam. Forecast as of 26.09.2025
For a long time, silver was rising on the back of strong industrial and investment demand. However, high prices are now dampening consumer interest in the white metal. Let’s discuss it and make a trading plan for XAGUSD.
The article covers the following subjects:
Major Takeaways
- XAGUSD quotes have reached a 14-year high.
- Industrial demand for silver risks declining.
- Precious metals remain effective inflation hedges.
- A drop below $44.6 will signal a sell opportunity.
Weekly Fundamental Forecast for Silver
Gold continues to break records, but silver is rising even faster. Its 55% rally in 2025 once again proves the advantage of the more volatile white metal in a bull market. It enjoys double support — from investment demand and a fifth consecutive annual deficit. No surprise that XAGUSD climbed above $45 an ounce for the first time in 14 years. But will this level stop buyers?
Silver Dynamics
Source: Bloomberg.
Commodity markets are cyclical. Rapid price growth lowers demand and leads to pullbacks. Will silver be an exception? According to BNEF, after steady annual growth from 2019 to 2024, silver consumption for solar panel production is expected to slow by 7% to 6,028 tons. The Silver Institute reports the sector accounts for 19% of total demand, while companies’ spending on silver has jumped from 5% to 14% in just two years. Attempts to switch to alternatives such as copper have brought little success.
Industrial demand for silver is likely to fade not only because of high prices, but also due to other factors. In the second half of the year, the global economy may lose steam. The early 2025 boost from front-loaded US imports has vanished, China is more selective with fiscal and monetary stimulus, and investors are questioning whether America’s massive AI investments will pay off.
In my view, the main driver of XAGUSD’s rally is investment demand. ETF holdings are soaring. According to Citigroup, gold-oriented ETFs saw record inflows of $10.5 billion in September and $50 billion since the start of 2025.
Gold and ETF holdings dynamics
Source: Bloomberg.
Both precious metals are strong hedges against inflation when the Fed isn’t providing that protection. The central bank has made it clear that it is more focused on a cooling labor market and intends to continue easing monetary policy. But with rate cuts, inflation risks — and stagflation risks — will rise. That backdrop is ideal for both gold and silver.
Thus, the rapid growth of XAGUSD prices is reducing silver’s benefit from industrial demand, but investment flows are still supporting it. As a result, the uptrend may slow and eventually shift into a consolidation phase. When that happens is hard to predict. For now, silver remains supported by stagflation risks and geopolitical concerns.
Weekly Trading Plan for XAGUSD
After hitting September’s initial targets at $42 and $44 per ounce, silver continued to rise. As long as it trades above $44.6, the focus should remain on buying. A move below that level would be a reason for short-term selling.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAGUSD in real time mode
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