Quick overview

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XAG/USD spikes witnessed are fundamentally rooted in a physical supply squeeze orchestrated from Shanghai and Beijing. 

Wall Street is highly divided on whether the next move is back to $120+ or ​​down to $60. Major investment banks are mostly calling for a steady, elevated plateau rather than immediate panic.  JP. Morgan forecasts a 2026 average of $81/oz, Goldman Sachs expects $85–$100/oz, and Citigroup sits on the bullish fringe with a target of $110/oz .

According to the 2026 World Silver Survey, the global market is currently in its sixth consecutive year of structural supply deficit. Because 70%+ of silver is mined as an accidental byproduct of copper, zinc, and lead mining, miners cannot easily ramp up silver production just because the price is high.

Unprecedented physical demand and a severe short squeeze pushed spot silver from its quiet $30 range last year to a jaw-dropping, nominal all-time high of $121.69 per ounce on January 29.

China dominates roughly 80% of global solar panel manufacturing. Ahead of an April policy shift removing export tax rebates, Chinese factories went on a ravenous buying spree, vacuuming up physical silver to lock in production costs. In March alone, Chinese silver imports surged 173% above the 10-year seasonal average.

To protect its domestic high-tech supply chains (solar, EVs, and AI hardware), Beijing implemented strict export restrictions on refined silver. Because China refines roughly 70% of London “Good Delivery” standard bullion, it effectively locks a massive portion of the world’s physical supply inside its own borders.

With gold rocketing toward historic highs near $5,500/oz, retail investors in China pivoted hard to silver as an accessible hedge, draining the Shanghai Futures Exchange and creating massive local price premiums over Western exchanges.

A market cannot go vertical forever without breaking. Immediately following the January peak, silver suffered a violent, stomach-churning technical “meltdown”.:Within weeks of hitting $121, spot silver shed nearly half its value, cratering to a low of $64 per ounce 

The crash was triggered by a hawkish pivot from the Federal Reserve and stronger-than-expected US employment data, which propped up the US Dollar Index (DXY) and took the wind out of speculative paper trading.

 At $100+ silver, solar manufacturers rapidly accelerated “thrifting”—altering their manufacturing processes to use up to 19% less silver paste per solar cell, which temporarily cooled industrial demand.