Silver Price Alert: XAG/USD Eyes $100 Breakout as 6th Year of Deficit Collides with AI Boom
Silver has outperformed gold this week, rising 3 to 4 percent in a single day to trade close to $90 per ounce. While broader markets...
Quick overview
- Silver has risen 3 to 4 percent this week, trading close to $90 per ounce, and has gained 180% year-over-year.
- The global silver market is facing a structural deficit of 67 million ounces, with demand outpacing supply due to its dual role as a safe-haven asset and industrial material.
- Geopolitical tensions and tariffs are driving investors towards silver, which is currently testing a key resistance level at $92.31.
- A break above $92.31 could lead silver to target $96.78, while falling below $88.80 may challenge the bullish outlook.
Silver has outperformed gold this week, rising 3 to 4 percent in a single day to trade close to $90 per ounce. While broader markets face volatility from tariffs, silver is benefiting from both geopolitical concerns and a persistent industrial supply deficit.
As of today, February 25, 2026, silver (XAG/USD) is hovering between $89.50 and $91.30, marking a massive 180% gain year-over-year. For traders and investors alike, the question is no longer if silver will reclaim its January highs of $121, but how fast it can break the current $92 resistance.
The Fundamental Fire: Why Silver is Outperforming Stocks
Silver’s role as both a safe-haven asset and an important industrial material is contributing to a significant supply shortage.
- Structural Deficit: The 67 Million Ounce Shortfall
For the sixth year in a row, the global silver market faces a structural deficit. The Silver Institute reports that 2026 supply may reach a ten-year high of 1.05 billion ounces, but this still falls short of demand. Since 80 percent of silver is produced as a byproduct of copper and zinc mining, increasing output quickly is not possible.
- The AI and Solar “Floor”
Even though higher prices have led some solar manufacturers to use copper instead of silver, overall demand for silver remains strong.
- AI infrastructure in next-generation data centers is becoming a major source of demand, as these facilities use silver for efficient electrical contacts.
- Green Energy: Solar panels and electric vehicles continue to drive industrial use of silver, which now makes up more than half of total demand.
- Geopolitical Jitters: US-Iran and Tariffs
With the third round of US-Iran nuclear talks scheduled for tomorrow in Geneva and a new 15 percent global tariff from the Trump administration, investors are turning to precious metals. Gold remains steady at $5,187, but silver’s smaller market size means it can see larger percentage moves.
Silver Technical Forecast: Can XAG/USD Hit $96.78?
On the two-hour chart, silver has continued its recovery from a base of $76.58. The price is following an upward trendline and forming a series of higher lows, which suggests strong buying interest.
The Bullish Setup:
- Moving Averages: The 50-period moving average ($82.94) has moved above the 200-period moving average ($83.41), which is known as a ‘Golden Cross’ and is often seen as a bullish signal on shorter timeframes.
- The Resistance Barrier: Silver is currently testing the $92.31 supply zone. A clean break here would shift the market structure and expose $96.78, with the path then clear for a psychological run toward $101.59.
- Momentum: Silver is now testing resistance at the $92.31 level. If the price moves above this point, it could open the way to $96.78 and possibly even $101.59.
Key Trading Levels to Watch
| Level Type | Price (USD) | Significance |
| Major Resistance | $121.64 | January 2026 All-Time High. |
| Immediate Resistance | $92.31 | Horizontal barrier & prior breakdown level. |
| Pivot Point | $88.80 | The current floor; bulls must defend this to stay in control. |
| Major Support | $80.43 | Psychological level and 50-day SMA alignment. |
The Analyst’s Verdict
Silver is currently in a very bullish position. Although the Federal Reserve’s hawkish approach and the possibility of higher interest rates pose risks for assets that do not pay yields, limited physical supply in London and COMEX inventories is helping to support prices in a way that stocks do not benefit from.
Trade idea: Look for an hourly close above $92.31 to target $96.78. If the price falls below $88.80, this would challenge the current bullish outlook and could mean a move back toward $85.
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