Silver (XAG/USD) Eyes $38 Target as Triangle Squeeze Signals Breakout Above $36.83
Silver (XAG/USD) is trading tightly near $36.18, hovering just above the 50-period EMA at $36.15, as a symmetrical triangle continues...
Quick overview
- Silver (XAG/USD) is trading near $36.18, showing signs of a potential breakout as it compresses within a symmetrical triangle on the 2-hour chart.
- The correlation between silver and gold has weakened significantly, allowing silver to respond more to its own drivers, particularly industrial demand.
- Industrial usage of silver has increased to 59% of global demand, driven largely by the solar sector, which is projected to account for 20% of silver demand by 2024.
- Technical analysis suggests bullish opportunities if silver breaks above $36.83, with a year-end target of $38 per ounce.
Silver (XAG/USD) is trading tightly near $36.18, hovering just above the 50-period EMA at $36.15, as a symmetrical triangle continues to compress on the 2-hour chart. While price action has been subdued, the narrowing range suggests that a breakout may be near—and this time, silver could be preparing to diverge from gold’s lead.
Despite struggling to hold the $36.00 level, technical momentum is quietly building. The setup aligns with strengthening fundamentals, especially on the industrial side. According to Bernard Dahdah, Precious Metals Analyst at Natixis, silver has room to outperform in the second half of 2025, with a year-end target of $38 per ounce—even if gold stalls around $3,250.
Correlation Break: Silver Decouples from Gold
A notable shift is emerging in the gold-silver dynamic. Historically, the metals have shown a correlation close to 0.8. But since January, that figure has fallen to 0.55, indicating that silver is starting to carve its own narrative.
Over the past five years, silver has moved 1.5% for every 1% change in gold. But since mid-2024, the correlation has weakened, giving silver more room to respond to its own drivers—primarily industrial demand and renewable energy investment.
This trend first emerged in May, as silver began playing catch-up after lagging gold’s safe-haven rally through 2023. With inflation still elevated and interest rate paths uncertain, investors are increasingly turning to undervalued metals—and silver is stepping into that role.
Solar Demand Surges as Silver’s Industrial Use Expands
Silver’s industrial footprint continues to expand. Industrial usage now accounts for 59% of global demand, up from 51.5% in 2019. A significant driver of that growth is the solar sector.
In 2015, solar accounted for just 6% of silver demand. By 2023, that figure had climbed to 16%, and it’s projected to reach 20% in 2024, making solar panels a key structural support for the metal.
However, risks remain. U.S. lawmakers are considering a new tax on renewable energy projects using Chinese components, set to take effect after December 31, 2027. If this curtails clean energy investments, silver could feel the ripple effects. Dahdah also warns that a slowdown in copper or energy infrastructure could stall silver’s upside.
Technical Levels and Trade Setups
On the chart, silver remains in a tightening triangle with clearly defined breakout levels:
Resistance:
- $36.22 (immediate)
- $36.83 (breakout threshold)
Support:
- $35.29 (primary)
- $34.76 and $34.16 (deeper support zones)
Trade Ideas:
- Bullish: Long above $36.83 with targets at $37.29 and $37.81
- Bearish: Short below $35.29 with downside targets at $34.76 and $34.16
Conclusion: Silver’s Path Narrows—but Opportunity Widens
Silver is compressing within a classic triangle pattern just as macro and sector fundamentals begin to tilt bullish. If price breaks decisively above $36.83 on volume, it could pave the way toward Dahdah’s $38 target—possibly positioning silver to outperform gold in the months ahead.
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