Silver’s Recovery from 2026 Low: Is the Rally Set to Continue?

Synopsis: Silver has surged 18% since its 2026 low, driven by several factors. Analysts believe the rally could continue, as expectations of rate cuts, geopolitical uncertainties, Dollar fluctuation, and tariff risks make silver an increasingly attractive safe-haven investment.

Silver has surged by 18% since hitting its low in 2026, prompting questions about the sustainability of this rally. With various global economic factors, including inflation concerns, interest rate movements, and geopolitical tensions, influencing its price, investors are curious if the upward momentum can continue.

Silver prices recently experienced a significant drop, falling by nearly Rs 1.94 lakh per kg, or 46%, from their peak of Rs 4,20,048 earlier this year to a low of Rs 2,25,805. This sharp decline marked a major setback for the precious metal.

However, silver has since recovered impressively, bouncing back by over Rs 40,000 from its lowest point, representing an 18% increase. This rebound highlights the volatility and resilience of silver in the market. Analysts suggest the recovery could continue, highlighting four key factors that could drive the next phase of the rally.

Tariff Risks

The US Supreme Court’s decision to overturn Trump’s Liberation Day tariffs has mostly been seen positively, but the President’s quick move to impose new global tariffs shows that trade tariffs are still a key tool for the administration. The European Commission has asked the US to stick to the trade deal it made with the EU last year and clarify its plans following the court’s ruling.

India is also looking into the impact of the ruling and has postponed an important trade meeting with the US. Markets are nervous about the uncertainty, but Dr. Renisha Chainani from Augmont pointed out that the weaker dollar is making precious metals cheaper for foreign buyers, boosting demand for these safer investments.

Geopolitical uncertainties

The ongoing tensions between the US and Iran over a nuclear deal have made gold and silver more attractive as safe investments. Last Friday, Trump warned Iran of possible military action if they don’t agree to a fair deal, but by Sunday, reports suggested some progress toward a possible agreement, with Iran saying the talks showed “encouraging signals.”

At the same time, the US military increased its presence in the Middle East, with the USS Gerald R. Ford aircraft carrier entering the Mediterranean. The Analyst pointed out that these rising tensions have added extra risk to the markets, which typically boosts the appeal of gold and silver as safer options, causing silver’s price to be more volatile.

Weak US GDP and macro signals

The Analyst pointed out that US economic data showed slower-than-expected GDP growth in Quarter four, at just 1.4 percent annualized, signalling a slowdown in economic expansion. This weaker growth, combined with persistent inflation, means policymakers are still closely monitoring data.

As a result, expectations for future rate cuts by the Federal Reserve have grown stronger, which is positive for gold and silver. Lower interest rates usually reduce real yields, making non-yielding assets like gold and silver more attractive.

The dollar has an inverse relationship with gold, meaning that when the dollar weakens, gold tends to become more attractive. Recently, the dollar has been losing strength, which has helped boost the appeal of gold and other precious metals.

Traders are factoring in the possibility of rate cuts later this year, as economic growth slows and inflation starts to ease. This environment typically supports higher demand for precious metals like gold and silver, as they are seen as safe investments during times of economic uncertainty and lower interest rates.

Silver Outlook: Despite recent price corrections, the commodity expert remains optimistic about silver’s outlook. MCX silver prices are up 13% in 2026, rising by Rs 30,200 per kg, and have reduced February losses to just 9%. They predict that COMEX silver could trade between $95 and $100 in the medium term, while MCX silver might reach Rs 3,00,000–Rs 3,10,000 per kg.

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