Silver (XAG/USD) rose on Friday, based on FXStreet data. It traded at $89.64 per troy ounce, up 0.90% from $88.84 on Thursday.
Since the start of the year, silver is up 26.11%. It is listed at $2.88 per gram.
Gold Silver Ratio Update
The gold/silver ratio was 57.78 on Friday, down from 58.49 on Thursday. The ratio shows how many ounces of silver equal the value of one ounce of gold.
Silver is traded as a precious metal and is used as a store of value and a medium of exchange. It can be bought as coins or bars, or through products such as exchange traded funds that track prices.
Prices can be affected by geopolitical risk, recession fears, interest rates, and the US Dollar because silver is priced in dollars. Supply factors, demand for investment products, mining output, and recycling rates can also move prices.
Industrial use in electronics and solar energy can affect demand because silver has very high electrical conductivity, higher than copper and gold. Economic activity in the US, China, and India, plus jewellery demand in India, can also influence prices.
Market Outlook And Strategy
With silver hitting $89.64, we see a powerful upward trend confirmed by the 26% gain since the start of the year. This momentum suggests traders should favor bullish strategies in the near term. The strong performance indicates that dips are likely being viewed as buying opportunities.
We believe this rally is heavily supported by expectations of looser monetary policy from the Federal Reserve, which began a cycle of rate cuts in 2025 to stimulate the economy. Current market data from the CME FedWatch Tool indicates a greater than 70% probability of another rate reduction in March. A lower interest rate environment typically weakens the US dollar and boosts non-yielding assets like silver.
The fundamental picture from industrial demand is also a key driver. Reports from early 2026 show that silver consumption in the solar panel and electric vehicle sectors is up 12% year-over-year, exceeding initial forecasts. This robust industrial use, combined with strong investor demand, creates a solid support level for the price.
The Gold/Silver ratio has compressed to 57.78, which is a significant drop from the average of over 75 that we observed for most of 2025. This signals that silver is outperforming gold and may continue to do so. This makes pairs trading, such as long silver and short gold positions, an attractive strategy to capture this relative strength.
Given the rapid price appreciation, implied volatility in silver options has risen to its highest level in over a year. This makes buying options expensive, so traders should consider strategies that benefit from high premiums. We see opportunity in selling out-of-the-money put spreads to collect this premium while defining risk.
