Silver Price Update: XAG/USD Rebounds Toward $83 as Market Eyes Sixth Deficit Year
Silver (XAG/USD) is making a strong recovery this Wednesday, trading between $81.50 and $83.00 per ounce. After briefly topping $100...
Quick overview
- Silver (XAG/USD) is recovering, trading between $81.50 and $83.00 per ounce, after a brief spike above $100 in January.
- The silver market is facing a supply shortage, with a projected 67 million ounce deficit in 2026 driven by steady industrial demand.
- Key technical levels indicate immediate resistance at $83.98 and critical support between $79.00 and $80.00, with bullish targets around $87.75.
- Analysts predict silver prices could soar to $120 to $150 by late 2026 due to increasing demand and limited supply.
Silver (XAG/USD) is making a strong recovery this Wednesday, trading between $81.50 and $83.00 per ounce. After briefly topping $100 in January, prices are now settling above a new support level as speculation cools off.
The Deficit Driver: Why 2026 is a “Tight” Year
The latest Silver Institute report from February 10 shows that the silver market is heading into its sixth year of supply shortage. The expected 67 million ounce deficit in 2026 is mainly due to steady industrial demand that does not change much with price.
- Solar and green technology are major drivers. Global solar PV capacity is expected to reach 665 to 700 GW this year. Even though manufacturers are using less silver per cell, solar still uses about 120 to 125 million ounces.
- The growth in AI hardware is also boosting demand. Silver’s excellent conductivity is essential for high-speed processors and cooling systems in AI data centers.
- On the supply side, mine production is only expected to grow by 1% to 820 million ounces. Since more than 70% of silver comes as a by-product from other metals, miners can’t quickly increase output even with high prices.
[[XAG/USD-graph]]
Silver (XAG/USD) Technical Analysis: Bulls Target $87.75 Breakout
Looking at the 2-hour chart, XAG/USD is forming higher lows, supported by an upward trendline near $81.50.
Key Levels to Watch:
- Immediate resistance is at $83.98, which is the current ceiling. If prices break above this level, the next target is the 100-period moving average near $87.75.
- The pivot point is $85.50. If the price closes above this level for the day, it would show that the correction since January has ended.
- Critical support is between $79.00 and $80.00. This range has become a key area where institutional investors are buying on dips.
Macro Outlook: The “Warsh Shock” & Safe-Haven Demand
Markets are still reacting to Kevin Warsh being nominated as Federal Reserve Chair. His reputation for supporting a strong dollar led to an initial price drop, but silver is now gaining from wider concerns about traditional debt-based systems.
“The rapid stabilization around $75–$82 indicates that silver has completed its backtest from speculative frenzy to its industrial value bottom,” notes Jiayi Li, a global market researcher.
The Gold to Silver Ratio is near multi-year lows at 61 to 62, showing silver’s strength compared to gold. Analysts at Bank of America and Citi are very bullish, with some predicting prices could reach $120 to $150 in late 2026 if silver becomes even harder to find.
Trading Strategy for February 11
With prices staying in a tight range, a breakout looks likely. Most traders are looking to go long near the $81.50 support, setting close stop-losses below $75.50 and aiming for a move back to $93.00.
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