Silver at $73.90 Surges 0.45% as 6th Deficit Deepens – Industrial Demand Shines?

Quick overview

Spot silver (XAG/USD) was up by 0.45% to trade at $73.90 an ounce early Friday morning on May 20, 2026. Silver’s sixth consecutive year of deficit in 2026 of 46.3 million ounces, has drained above-ground inventory since 2021 by a hefty 762 million ounces or more.

Industrial demand will stay on track, fueled by growth in solar PV panels, EVs, electronics, 5G tech, and data centers that will power AI. Chinese buying will also contribute to tight supply. Silver has more leverage as it’s both a monetary metal and major industrial input.

Moderating inflation expectations and lower energy prices from a tenuous U.S.-Iran ceasefire have dampened precious metals buying. However, rising manufacturing optimism, a bullish backdrop of global green initiatives will spur industrial demand.

The U.S.-Iran ceasefire remains largely intact more than six weeks later, and it’s helped ease geopolitical risk in the Strait of Hormuz as tankers have begun to pass through more regularly.

Silver Technical Analysis

The XAGUSD 4H chart shows a bullish hammer, which formed after the metal bounced off the lower blue ascending channel (it hit $69 in mid-May) and then tested the red MA dynamic support, which ran through $73.90 to $75.13. The price is above the purple MA around $76 to $78 and it has made higher lows that fit inside its upward-parallel channels. There’s been no triangle breakdown or bearish engulfing candle.

This impulsive move higher in green pushed past its prior highs and then went into what could be called flag-style consolidation that protected the 0.236 to 0.382 Fibonacci retracement levels. The relative-strength index in its oversold range at 32 to 33 has formed significant positive divergence on the pullback.

That tells me the bears are worn out and that there is a high probability of a move higher before the market goes overbought. I expect resistance at $75.13 to $76.12, then again at $78.84 to $81.06.

• Resistance: $75.13 → $76.12 → $78.84
• Support: $73.90 → $71.36

Buy above $74.20 with a target of $76.12 to $78.84 and a stop loss below $73.80. Silver tends to respond to U.S. economic data releases, changes in industrial activity trends, and broad shifts in sentiment.

For now, there seems to be little macro headroom, but it is worth noting that silver’s chronic deficits and its expanding role in green tech should continue to be a positive catalyst in the long term.

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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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