Silver (XAG) Forecast: Silver Rally Eyes $40 After Clearing Major Resistance at $36.89

The gold-silver ratio continues to normalize after trading above 100 earlier this year, pointing to a significant revaluation for silver. Recent compression to the 92–94 range suggests the white metal is in the early stages of a catch-up move. Historically, extreme GSR readings have preceded periods of silver outperformance. In 1992 and post-2020, similar levels led to 50–140% rallies in silver.

Rate Cuts, ETF Inflows, and Central Bank Buying Add Fuel

Silver’s breakout is further supported by macro tailwinds. Expected Fed rate cuts this year are adding to the bullish tilt across the precious metals space. Institutional interest is also rising, with silver ETF holdings up 2.2 million ounces in a single day last week. Russia’s announcement to acquire $535 million in silver over the next three years marks the first time a central bank has openly entered the silver market in this bull cycle.

Market Forecast: Silver Poised to Test $40

With technical levels clearing and fundamentals aligning, silver appears well-positioned to test $40 in the near term. The compression in the gold-silver ratio, coupled with sustained industrial demand and structural supply deficits, provides a strong tailwind. As institutional flows increase and central banks take notice, silver may finally be stepping into a prolonged revaluation phase.

More Information in our Economic Calendar.