Silver (XAG/USD) price has experienced a good run in 2024, with gains in three out of the first five months of the year. After losing about 10.5 percent of its value between December 2023 and February 2024, the commodity rose steadily in March, gaining 8.8 percent. In addition, silver prices rose by 8.20 percent in April. However, the highlight of its performance was May’s gain of 22 percent, during which the price crossed the $30 per ounce mark on May 17. Following its scintillating run, silver has gained 32.2 percent in 2024, outperforming gold’s 14.7 percent.
Since then, silver prices have undergone a series of fluctuations, reaching a new multi-year high of $34.84 in late 2024 before experiencing a sharp correction. The metal dropped to a low of $26.43 in early 2025, driven by profit-taking and concerns about global economic growth. However, silver has since rebounded, with XAG/USD currently trading at $31.82 as of February 6, 2025. This places it near a critical resistance zone, with traders closely monitoring whether the current rally has enough strength to break higher.
Silver belongs to a category of metals considered very precious due to its wide range of uses and its preference as a store of value. Human civilizations have used Gold and Silver as primary means to exchange and store value for thousands of years. Furthermore, silver is used in several industrial processes. As a result, the price of silver has always remained tied to economic activity worldwide.
The XAG/USD tracks the price of Silver in terms of the United States dollar. Therefore, the pair generally shows an inverse correlation to the strength or weakness of the greenback.
Silver reached its highest level in nearly 12 years, at $32.52, underlining a good run in May. On May 1, the Federal Reserve maintained interest rates at the 5.25%-5.50% range. Still, there is increasing pressure to lower rates in the year’s second half after a series of weaker-than-expected macroeconomic data. In June 2024, silver prices experienced a significant decline, dropping nearly 5% due to disappointing global manufacturing data. The market sentiment became bullish in July 2024, with analysts suggesting that the metal prices had stabilised.
In the latest signal that the US economy could be facing headwinds, the August nonfarm payroll figures came in at 142k, lower than the forecast 160k. In addition, the unemployment rate rose to 4.2 percent. This has increased the appeal of safe-haven metals like silver and gold and could propel their prices higher.
In late 2024, silver prices surged past $34 per ounce before undergoing a sharp pullback. The decline was driven by rising US bond yields, which strengthened the dollar and temporarily reduced demand for silver. However, the recent recovery in early 2025 has been supported by strong industrial demand and safe-haven buying. The silver market has also reacted positively to recent US labor data, which showed weaker-than-expected job growth, increasing speculation that the Federal Reserve may ease monetary policy sooner than previously anticipated.
According to the Silver Institute, the demand for silver is expected to reach 1.2 billion ounces, the second-highest on record. This will likely support a price hike, potentially going towards the $30 per ounce territory. Notably, the commodity hasn’t been able to reach that mark since its 2013 meltdown.
While Fed interest rate policy is expected to play a part in determining the commodity’s price, much will also depend on industrial demand. The outlook for the global economy is generally positive. In its latest forecast, the IMF projected a “slow but steady” global economic growth, with real GDP growth revised upwards in April by 0.1% to 3.2%.
Furthermore, China reported a better-than-expected GDP growth of 5.3% in Q1 of 2024, beating the forecast 4.8%. The country expects the economy to grow by about 5% in 2024. The world’s second-largest economy also recently reported a growth in industrial activity for the first time in six months. These statistics are good news for silver prices as they could translate to increased demand and higher prices, thanks to silver’s use as both a luxury and industrial metal.
However, US economic data will play a greater role in defining the price trajectory. As inflation rate remains stubbornly above the target 2 percent, high interest rates will continue to be the single biggest influence on silver prices. The US released its latest monthly and quarterly Personal Consumption Expenditure (PCE) figures, on September 2, 2024, where the headline print rose 0.2 percent monthly and 2.5% annually. A rise in the figures will increase the pressure on silver prices and vice versa.
The following price chart shows the Silver price history since 1930s.
The following XAG/USD chart reveals that Silver prices per ounce have generally been strong since September last year. The price bottomed out at around $20.68 in October 2023, but rose strongly in November, followed by a loss of 10.6% between December 2023 and February 2024. Through the ups and downs during that period, the price of Silver has risen by 36.21%.
Silver (XAG/USD) is trading around $33.02, consolidating after a strong bullish move. The price remains supported by $32.25 and faces immediate resistance at $33.01-$33.02. A decisive breakout above this level could fuel further upside momentum toward $34.84.
If silver manages to sustain gains above $33.01, bullish momentum could extend toward $34.84 in the coming sessions. However, a rejection at resistance may lead to a short-term retracement toward $32.25 – $31.33 before the next leg higher.
I predicted this drop in precious metal prices in my last Silver price forecast. I also regularly update the price targets on my Twitter, where you are welcome to follow me.
Silver is likely to experience increased demand, especially from the electric vehicle (EV) market, as many governments prioritise transition to renewable energy. Also, the US economy could slow down due to higher-for-longer interest rates. If this really happens, then the Silver and Gold price may increase as they are the preferred store of value across the world. A simple pitchfork analysis gives us a silver price forecast for 2025 between $34 and $50.
The industrial demand for silver is expected to grow significantly in 2025, particularly in sectors such as solar energy and advanced battery technologies. With Samsung and other tech giants exploring new battery chemistries that incorporate silver, demand for the metal is likely to remain strong throughout the year. Additionally, expectations of a weaker US dollar in the second half of 2025 could further support silver prices.
A lot can happen in the world till 2030. Considering the current state of the global economy and the inflation worldwide, I’d be surprised if Silver doesn’t make a new all-time high within the next seven years. Therefore, XAG/USD may break above its 2011 all-time high of $50. However, close attention must still be given to the changing global macroeconomic scenario.
While the Silver price prediction for 2040 is anybody’s guess, we can still consider a few different scenarios. If the US dollar remains the global reserve currency within the next two decades, Silver can comfortably trade above $50 by 2040. Technical analysis also gives a price range of $78-$138.
You can buy silver on brokers like ATFX, IG, TD Ameritrade, Interactive Brokers, Capital.com, Exness, etc. These brokers allow you to trade the XAG/USD pair by adding minimal margin. However, you must learn risk management before taking leveraged positions on any asset.
Nowadays, there are various ways to gain exposure to the volatility in precious metals. Holding silver physically involves additional costs. Therefore, investing in Silver CFDs or futures contracts is best via an online broker like eToro, Exness, TD Ameritrade, etc.
As the name suggests, the Silver spot price is the price of bullion coins for immediate delivery. The current spot price is $30.83, but it is very volatile as it trades almost 24 hours a day worldwide wherever the markets are open. The biggest trading volume comes from the US, UK, Japan, Hong Kong, etc.
Silver prices have staged an impressive recovery in early 2025 after experiencing a steep correction in late 2024. With renewed industrial demand and rising safe-haven interest, XAG/USD has climbed back to $31.82, approaching key resistance at $32.98. If bulls can maintain momentum, silver could revisit its previous highs above $34. However, macroeconomic conditions, including Federal Reserve policy and inflation trends, will play a crucial role in shaping silver’s trajectory in the coming months.
This post was last modified on Feb 20, 2025, 11:05 GMT 11:05