Silver price surged in 2025, becoming one of the top-performing assets as it jumped from $28 in April to $67.15 today. It soared by 133% this year, outperforming gold, which jumped by 63% and the crypto market, which broadly tumbled by 11%. This article explores why XAG price soared and why it may retreat in 2026.
Why Silver Price Surged in 2025
Silver, one of the top precious metals, soared to a record high, driven by rising demand, institutional demand, Federal Reserve interest rate cuts, supply constraints, and the Fear of Missing Out (FOMO).
One major catalyst for the ongoing silver price surge is its close correlation with gold, a metal that surged to a record high. Gold’s demand was driven by safe-haven demand after Donald Trump introduced major tariffs and changed the world order to some extent. He even attempted to remove Jerome Powell from the Federal Reserve, a move that would have failed.
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Gold price also jumped because do the rising central bank demand, with countries like China intensifying their accumulation in the past few years as risks about the safety of the US dollar rose.
Most importantly, Tether became a major gold whale as it accumulated tons of gold during the year. The company holds over 116 tons of gold, currently valued at over $16 billion. These gold holdings back the USDT stablecoin and Tether Gold.
Silver price often do well when gold is soaring because of their correlation and the fact that its price is much lower, making it more attractive among retail investors.
Meanwhile, some major silver mining companies like Fresnillo reduced their production this year, leading to a squeeze as demand rose. As a result, there was a supply deficit of about 150 million ounces as demand from solar, electronics, ETFs, and electric vehicles rose.
Silver price also jumped as the US dollar dropped, with the closely-watched DXY Index falling from the year-to-date high of $110 to the current $100. Most metals do well when the dollar is falling as many of them are priced in the currency.
Fundamentally, these demand and supply drivers may boost the silver price in 2026. Most importantly, the US inflation is falling and the unemployment rate rising, meaning that the Federal Reserve will likely deliver several interest rate cuts during the year.
Technical Analysis Suggests that Silver Prices May Retreat in 2025
The daily timeframe chart shows that the silver price has been in a strong uptrend this year and is now sitting at its all-time high. This surge made it a top gainer as it beat other top assets like stocks, commodities, and crypto.
The risk, however, is that silver has become highly overbought, with most oscillators remaining above their overbought zones.
Additionally, silver remains above the 50-day and 200-day Exponential Moving Averages. While this is a bullish catalyst, there is a risk that it will go through a situation known as mean reversion.
Mean reversion is a situation where an asset in a bull run retreats and moves closer to the historical moving averages. A good example of this is what the Zcash price did recently when it plunged from its all-time high. The decline will also happen as it moves to the distribution and markup phases of the Wyckoff Theory.
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