Silver Price Forecast: XAG Struggles Below $74.80 as Sixth Deficit Deepens – Bears Eye $72 Next?

Quick overview

Silver (XAG/USD) is trying to pick up some steam at around $74.00 per ounce, attempting to bounce back after finding some footing around $71.20.

Key Drivers Today

• Structural Deficit Worsens : Silver is on track to see a sixth consecutive annual shortfall in 2026, a projected 46.3 million ounce deficit – which is 15% bigger than the 40.3 million ounce shortfall we saw in 2025 (Silver Institute). All the while, the total amount we’ve been drawing from those above-ground stocks since 2021 has now surpassed 762 million ounces – that’s left the market with impossibly low inventories.
• Supply Outlook is Tightening : Global mine production is forecast to ease off slightly by 0.3% to 844.1 million ounces. Mexico’s modest gains are getting completely cancelled out by declines elsewhere.
• Demand is Looking a Little Shaky : Industrial fabrication (which accounts for more than 55% of total demand) is expected to drop 2–3% to around 640–650 million ounces – that’s the lowest we’ve seen in four years due to thrifting in photovoltaics . But, demand from electronics, AI infrastructure, data centres and EVs is still providing some solid structural support. On the physical side, investment in bars and coins is looking like it’s going to rise and help stabilise demand a bit.
• Macro Backdrop Update : The Federal Reserve kept rates at 3.50–3.75%, with Chair Powell talking about how high inflation risks are still a big worry due to energy costs that are getting propped up by ongoing Middle East tensions and Strait of Hormuz disruptions.

Silver’s role in both the monetary and industrial sectors, combined with it’s persistent inventory difficulties, are still key long-term drivers.

Silver (XAG/USD) Technicals

Silver continues to respect the descending channel on the 4 hour chart, with lower highs showing that there is still selling interest. The price is currently sitting below the 50 EMA and is really struggling against significant resistance near $74.70–$74.80. And to make matters worse, the 200 EMA around $76.40 is creating even more pressure downwards.

The RSI has started to rebound towards 50, which tells us it’s moved out of being seriously oversold and is now neutral – but without a lot of conviction in the buy side.

Key Levels

• Resistance: $74.80 → $76.50
• Support: $72.00 → $71.20

Trade Idea : Sell below $74.80 with a target in mind of $72.00, with a stop above $76.50.

Silver remains highly sensitive to a whole host of things, from energy market developments to central bank policy signals, through to physical buying flows.

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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