Silver Surge_ Bulls Defend $72 Support as Industrial Demand Eyes a New 2026 Peak
Silver (XAG/USD) is making a strong recovery this Wednesday after several days of falling prices that reached a key support level at $72.86.
Quick overview
- Silver (XAG/USD) is rebounding after hitting a key support level at $72.86, attracting buyers amid a stronger U.S. Dollar.
- Large institutional investors are buying heavily at around $73.00, viewing it as a favorable long-term entry point.
- Silver's demand is expected to surge due to its critical role in AI infrastructure and the solar industry, leading to a projected supply shortfall in 2026.
- Analysts predict an average silver price of $81 per ounce for 2026, with key resistance levels to watch for potential price movements.
Silver (XAG/USD) is making a strong recovery this Wednesday after several days of falling prices that reached a key support level at $72.86. While other precious metals have struggled due to a stronger U.S. Dollar, silver’s role as both a safe-haven asset and an important industrial metal is attracting buyers looking for deals.
With global markets experiencing lower trading activity during the Lunar New Year, conditions are in place for a possible sharp move toward the $80 mark.
The Rebound: Why Silver is Finding its “Second Wind”
After dropping earlier in the week along with gold, silver is now starting to perform better than gold. The main reason is that the recent 20% decline has made silver look undervalued compared to its expected supply shortage in 2026.
- Bargain Hunting at $73: When prices approached $73.00, large institutional investors began buying heavily, seeing this level as a good long-term entry point.
- Holiday Thinness: With China’s markets closed for the holiday, smaller purchases in Western markets are having a bigger effect than usual, helping to push prices up toward $74.64.
- ETF Resilience: Even though prices have fallen, silver-focused ETFs have attracted net inflows of 15 to 20 million ounces in 2026, which is reducing the amount of physical silver available.
The “Green Engine”: Why Silver is the AI Metal of 2026
For new investors, silver’s value in 2026 is driven not only by concerns about inflation but also by its role in the digital and green technology sectors.
1. The AI Infrastructure Boom
Silver is the most conductive metal available. As companies like Nvidia and other tech leaders build large AI data centers, demand for silver in cooling systems and high-voltage direct current technology is rising quickly.
2. Solar PV: The Unstoppable Consumer
Global solar capacity is expected to reach a record 665 GW in 2026. The solar industry uses almost 20% of the world’s silver supply. Even though manufacturers are using less silver per panel, the high number of new installations is keeping the market in a constant shortage.
3. The Sixth Consecutive Deficit
The Silver Institute projects a 67 million ounce shortfall for 2026. Because over 70% of silver is a “by-product” of mining other metals (like zinc or copper), miners cannot simply “turn on the taps” to meet higher prices, creating a permanent supply squeeze.
Technical Analysis: Bulls Eye the $79 Breakout
On the 2-hour chart, XAG/USD has printed a strong recovery from its $72.19 horizontal support.
| Key Technical Level | Price (USD) | Significance |
| Major Resistance | $82.45 | The “Bull Gateway”; a break here opens the path to $90+. |
| Immediate Resistance | $78.73 | Aligns with the descending trendline; today’s primary target. |
| Critical Support | $72.19 | The “Must-Hold” floor; a breach here risks a slide to $64. |
| 50-Period EMA | $79.46 | Acts as the dynamic ceiling for current relief rallies. |
The Verdict: A Volatile Path to $81
Analysts at J.P. Morgan and Citigroup are still optimistic, predicting an average price of $81 per ounce for 2026. Short-term drops toward $70 could happen if the U.S. Dollar keeps rising, but the basic support level is higher than in past years.
Investor Tip: Watch the $76.00 level closely. If prices stay above this point, it could cause a short squeeze, forcing speculators who bet against silver to buy back their positions.
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