Silver Sends a Signal. Forecast as of 07.11.2025 | LiteFinance
There have been three major spikes and subsequent declines in silver’s history, each tied to a surge in demand followed by its exhaustion. What could the latest XAG/USD plunge in autumn be signaling? Let’s discuss it and make a trading plan.
The article covers the following subjects:
Major Takeaways
- XAGUSD’s rally was driven by supply shortages.
- The US added silver to its list of critical minerals.
- Historically, silver crashes followed demand exhaustion.
- Sell silver on rallies to $50.6 and $51.7.
Monthly Fundamental Forecast for Silver
What triggered the sell-off in precious metals that had been thriving for most of 2025? Some point to the de-escalation of geopolitical tensions in the Middle East and the easing of the US–China trade conflict. Others blame excessive speculative demand or doubts about further Fed rate cuts, which strengthened the US dollar. But could there be a deeper cause? Could silver be hinting at it?
Before reaching its October record above $54 per ounce, silver was outperforming gold. Global demand had outpaced supply for four consecutive years, reducing London inventories by one-third since 2021. Rumors of US import tariffs accelerated the flow of bullion from Britain to America. Lease rates spiked to a record 34.9% by mid-autumn.
Silver Lease Rate Dynamics
Source: Bloomberg.
Only the XAG/USD drop managed to cool the market and stabilize the physical metal segment. Interestingly, silver barely reacted to the news that the White House had included it in the list of critical minerals. National security considerations allow the U.S. administration to impose tariffs on the items on this list.
Even more intriguing is silver’s historical pattern: three major rallies, each ending in collapse and long consolidation, all driven by extreme demand surges. First, demand surged for cameras in the 1970s; then for solar panels in 2011; and finally for electric vehicles and AI data centers today. However, the shift to digital photography and higher efficiency in solar panel manufacturing eventually reduced these industries’ share in total silver consumption.
Silver Rally Patterns Through History
Source: Bloomberg.
Does the autumn plunge in XAG/USD suggest that AI-related technology spending has peaked? Some analysts argue that investments in artificial intelligence are proving inefficient, and companies may fail to see adequate returns. Combined with a broader revaluation of tech giants, this could trigger a downward correction in US stock indices.
The previous episodes — in the 1970s and in 2011 — didn’t confirm silver’s role as a harbinger of turmoil in the US equity market. However, back then, neither photography nor solar panels were the main drivers in the S&P 500 rally, unlike artificial intelligence technologies today.
Monthly Trading Plan for XAGUSD
In my view, XAG/USD could see a short-term rebound amid uncertainty around tariffs and expectations of Fed rate cuts. However, a lasting uptrend is unlikely in the coming years. The current strategy is to switch from short-term buying on breakouts above $49.2 per ounce to medium-term selling on pullbacks from $50.6 and $51.7.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAGUSD in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.
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