Silver Price Recovers to $73: Can the Sixth Deficit Propel XAG/USD Back to $80?

Quick overview

After a tough month of sell-offs, the silver market is starting to recover. On March 25, 2026, spot silver (XAG/USD) is trading between $71.00 and $73.50 per ounce, with the latest price around $73.24. This is about a 6% rebound from recent lows, following a sharp drop of nearly 40% from January’s high of $121. The main reason for today’s rally is a five-day pause in Middle East tensions. President Trump’s signals of possible diplomacy with Iran have eased oil-driven inflation fears, which had strengthened the US Dollar. As a result, silver is regaining its place as both an important industrial metal and a hedge against economic uncertainty.

Even with this rebound, silver is still the most volatile precious metal. Gold has steadied, but silver faces the challenge of high energy costs from the Strait of Hormuz conflict, which could hurt industrial demand. At the same time, ongoing geopolitical risks are driving investors to buy silver as a safe haven.

Technical Analysis: The $74.35 Resistance “Pivot”

Looking at the 4-hour chart, silver is now testing the top of its short-term recovery range. Although the price bounced strongly from the $66.03 support level, the overall technical outlook is still leaning downward.

• Immediate Resistance: The $74.00 to $74.35 area is a key level to watch. It matches up with the 50-period moving average. If silver cannot move above this zone, it may mean the recent rise is only a temporary bounce.
• The Bearish Ceiling: Strong resistance is at $78.01, which is the 200-period moving average. Unless silver closes clearly above this level and breaks the main downward trendline from $89.32, sellers will likely stay in control for the medium term.
• Support Floors: If talks break down and oil prices rise again, silver could fall back to $66.03. If it drops below that, the next major support is at $61.07.
• Momentum: The RSI is now at 54, which means silver is no longer oversold. This shows momentum is improving, but silver still needs a clear trigger, like a softer stance from the Fed or a clear easing of tensions, to start a real trend reversal.

Fundamental Strength: The 117 Million Ounce Shortfall

While traders in paper silver have been selling off leveraged positions, the physical silver market is getting tighter at a record pace. 2026 is set to be the sixth year in a row with a global supply deficit.

• Explosive Demand: Industrial demand is “exploding” due to the convergence of three sectors: Solar Energy (N-type cells requiring more silver), Electric Vehicles (increasing silver content per unit), and the AI Data Center boom (high-performance electronics).
• Investment Floor: Physical bar and coin demand is forecast to rise 20% this year as retail investors in Asia and the West seek protection against currency debasement.
• Supply Inelasticity: Global mine production could hit a ten-year high of 1.05 billion ounces, but falling ore grades at major mines such as Fresnillo mean supply cannot keep up with the rapid growth in green technology uses.

Macro Headwinds: The Gold/Silver Ratio Alert

The Gold/Silver Ratio is now at a high 64:1, up from 59:1 earlier this year. This shows that silver has lagged behind gold during the March correction. In the past, a rising ratio during a market drop often means silver could soon catch up, especially if the US Dollar stops rising quickly.

JPMorgan still expects silver to average $81 per ounce in 2026, so the current price of $73 could be a good value for long-term investors. In the short term, though, prices will react strongly to the March 28 deadline for the US-Iran strike postponement. If there is new military action near Iran’s energy centers, silver could quickly become very volatile again as the market adjusts for higher real yields.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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