Silver Plunges to $59 as Geopolitical Thaw and Fed Rate Fears Eclipse a Widening Supply Gap
Veröffentlicht: 29.06.2026 um 10:21 Uhr, Redaktion boerse-global.de
Silver has suffered a fresh blow, shedding $5.77 in a single session to trade at $59.05 per troy ounce, as investors recalibrate their outlook in the face of two powerful headwinds. A surprise diplomatic breakthrough between Washington and Tehran has stripped the metal of its safe-haven premium, while the Federal Reserve’s unrelenting hawkish stance continues to prop up the dollar and weigh on precious metals. The drop comes despite a deepening structural deficit that the Silver Institute expects to reach 46.3 million ounces in 2026.
The geopolitical landscape shifted dramatically over the past 48 hours. The United States and Iran agreed to a temporary halt on mutual attacks, with the primary goal of keeping shipping lanes open through the Strait of Hormuz. Negotiators are meeting in Doha on Tuesday to hammer out a framework agreement aimed at resolving the broader dispute. For silver, this détente has removed the key catalyst that had driven prices higher in recent weeks, erasing the risk premium almost overnight.
On the monetary front, the picture is equally challenging. Fed Chair Kevin Warsh, who took office in May, has kept the federal funds rate steady in a range of 3.50% to 3.75%, but markets are pricing in three more rate increases this year. The probability of a first move in September currently stands at 62%. A strong June jobs report — due Thursday, with economists expecting roughly 172,000 new positions — would reinforce that outlook. The dollar has strengthened accordingly, making dollar-denominated bullion more expensive for overseas buyers. Warsh is also scheduled to speak on July 1 at the European Central Bank’s forum in Sintra, which could provide further clues on the Fed’s trajectory.
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Yet the price weakness stands in stark contrast to the fundamentals of the physical market. The silver market is headed for its sixth consecutive annual supply deficit, and the shortfall is widening. Mining output is constrained by the fact that roughly 70% of global production comes as a by-product of zinc, lead, and copper mining — meaning higher silver prices do not automatically translate into new mine projects. Even a 12-year high in recycling volumes has failed to close the gap with industrial consumption.
Demand patterns are shifting beneath the surface. Photovoltaic manufacturers, squeezed by elevated silver costs, have cut their consumption by almost a fifth year-on-year. That industrial retreat is being offset by a surge in private investment: retail buyers have flooded into physical coins and bars, more than compensating for the slowdown from the solar sector. On the paper market, however, sentiment remains bearish. ETF holdings dropped by over 13 million ounces in the past month, driving the gold-silver ratio above 65.
Technically, the metal appears deeply oversold. The relative strength index sits at 34, a level that often precedes a bounce. Analysts identify the next meaningful support near $56.50, while the $60.50 area has flipped from support to resistance. Whether that floor holds will likely hinge on the outcome of the Doha talks. Should negotiations collapse, the safe-haven bid could return; a successful agreement would train all eyes on the Fed and the upcoming jobs data.
The market’s split personality is reflected in the wide range of institutional forecasts. Banks such as J.P. Morgan project an average price of around $80 for 2026, but individual estimates swing from $44 to $165 — a sign of just how uncertain the near-term path remains. For now, the bears have the upper hand, but the physical deficit is waiting in the wings, ready to reassert itself once the Fed signals an end to its tightening cycle.
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