The price of silver rallied again above the key $50 level, and the next moves will be important.
XAGUSD – Weekly Chart
The price of XAGUSD has jumped on the weekly chart to clear the $50 level, and this is the key level that needs to be held to move higher. If the advance failed at this price again, a longer downtrend could be in place.
The price history over the past 50 years has shown that when silver prices reach $50, or get close, which has occurred three times, it was unable to secure that price. We are now looking at another attempt to get above this key level. If investors see continued price raises above $50 then they will gain confidence that a new bull market has begun in the price of precious metals.
This week’s price gains in gold and silver were driven by a deal to end the longest U.S. government shutdown in history. A restart of the government would see the release of long-delayed U.S. economic data, which is expected to show a worsening outlook for the U.S. and could be a catalyst for more Federal Reserve easing of its monetary policy as soon as the December FOMC meeting.
Lower interest rates are bullish for precious metals, and inflation data from the U.S. was also surprisingly weak, which could see rate cuts and maybe even put markets on watch for stimulus measures.
Major financial institutions have remained bullish on metals, with HSBC pricing gold at $5,000 for 2026. Silver’s push above $50 could lead to some FOMO buying from retail investors that could drive the market higher.
Although silver is a precious metal and recognized as an important monetary asset, its use case is changing as more than 60% of its demand now comes from industrial applications.
Growing industrial demand is the key factor behind silver’s ongoing supply deficit. Analysts have said that this could further complicate the market and its already fragile global supply chain. Strong industrial demand has created substantial supply deficits in the silver market over the past five years, depleting above-ground stockpiles to critically low levels.
The fundamentals are in place for elevated prices, and investors will be watching how the metal behaves at the second attempt to breach $50 this year.
