Silver Slumps to $56.50 as Dollar Strength and Tech Margin Calls Override a Massive Supply Deficit
25.06.2026 - 17:13:06 | boerse-global.de
Silver extended its slide on Thursday, plunging to a fresh 2025 low near $56.50 an ounce as a resurgent dollar and forced liquidation from technology sector losses overwhelmed the metal’s structural supply deficit. The white metal had already breached its previous year low of $58.75 on Wednesday before accelerating losses below the psychologically important $57 threshold.
The dollar index surged past 101.80, its highest since May 2025, after Federal Reserve Chair Kevin Warsh reiterated his hawkish stance on inflation. While the Fed held rates steady at its last meeting, CME FedWatch data now shows an 83.1% probability of a rate increase by December 2026. Bank of America has gone further, forecasting three 25-basis-point hikes in September, October and December next year—lifting the fed funds rate to 4.25%-4.50%—while Deutsche Bank expects two such moves.
A strong dollar makes dollar-denominated commodities more expensive for international buyers, squeezing demand for silver. That dynamic was amplified by a broader rout in technology stocks, which forced many investors to sell gold and silver holdings to cover margin calls and offset portfolio losses. Physical buyers in some regions showed increased interest, but the selling pressure at global exchanges proved relentless.
The pain is disproportionately hitting silver compared with gold. The metal lost 5.41% on Tuesday alone to $61.57, far outpacing gold’s decline. The gold-silver ratio ballooned to 65.6, reflecting silver’s heavier reliance on industrial demand—roughly 50% of total consumption. When rate-hike fears dampen growth expectations, industrial commodities suffer most. Silver now trades more than 50% below its record near $120, erasing gains from a 148% surge last year.
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Adding to the bearish backdrop, progress in US-Iran peace talks earlier weighed on energy prices, but the relief for silver was fleeting. The metal’s selloff initially quickened when the Iran conflict drove energy costs higher, and while crude has since eased, the drag from rising rate expectations has proven far more powerful.
All eyes are now on the Fed’s preferred inflation gauge due later Thursday. The PCE index is expected to show headline inflation at 4.1% year-on-year for May, up from 3.8% in April, with the core rate climbing to 3.4%. A hotter-than-anticipated reading would reinforce the case for tighter policy and likely push silver lower; a softer print could provide temporary respite.
The long-term supply picture offers a counterpoint that bulls hope will matter again. The Silver Institute projects a deficit of 46.3 million ounces in 2026—the sixth consecutive annual shortfall. Mine output cannot keep pace because most silver is a by-product of copper and zinc mining, and industrial uses in solar panels, electric vehicles and data centers permanently remove material from the market. For now, however, short-term macro forces dominate.
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Chartwise, the next support stands at $56.50, with a break below opening the door to $55.00. A recovery above $60.48 would be needed to brighten the technical outlook. The structural deficit remains a compelling narrative, but until the Fed signals a pivot on rates, silver’s path of least resistance points lower.
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