Silver Claws Back From 2025 Low as Traders Weigh Fed Odds Against a Shrinking Supply Gap
Published on 10/27/2026 at 07:51 | Editorial boerse-global.de
Silver is steadying itself after touching its weakest level in more than a year, with softer crude prices and positioning ahead of the Federal Reserve's rate decision doing the heavy lifting. The metal's front-month COMEX contract settled at USD 53.96 per troy ounce on Friday — the lowest close since November 2025 — before recovering ground yesterday as energy costs retreated.
That rebound carries a caveat. Markets surveyed by CME FedWatch overwhelmingly expect the central bank to stand pat at the meeting that got under way today, with the decision due tomorrow. But a hike is already priced in for December, which keeps a lid on how far bullion can run in the near term.
The mechanics behind Friday's slide were straightforward enough. Rising oil prices had stoked fears that US borrowing costs would stay elevated for longer, and those fears bore down on precious metals. Once crude began to ease, so did the pressure — a reminder that the energy market remains one of the quickest transmission channels into silver sentiment right now.
India Opens the Import Taps
Physical demand offered a second, more tangible support. India has eased restrictions on silver imports, with approvals designed to cover seasonal festival buying. Dealer-reported premiums in the country, however, argue against any immediate tightening of local supply: they fell to USD 0.45 an ounce from as much as USD 2.50 a week earlier, according to Reuters. The import green light on its own, then, is no clear-cut signal of upward price pressure.
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Where the picture gets genuinely murky is supply. HSBC, in an assessment published yesterday, pencilled in a silver market deficit of 5 million ounces for 2026. The Silver Institute had projected 46.3 million ounces back in April. Both camps assume a shortfall exists — but the gap between them is vast, and a much smaller deficit would undercut the case for pronounced scarcity. Neither figure is a settled market balance yet.
UBS Global Wealth Management is firmly in the bullish camp. In a note released Sunday, the bank reiterated a target of USD 80 per ounce by September 2027, and it expects 2026 to deliver the sixth consecutive annual market deficit. Earlier guidance from the Swiss house laid out the path in more detail: USD 70 by December 2026, USD 75 by mid-2027, and USD 80 by September 2027. That trajectory describes a recovery unfolding over many months — not the confirmed start of an uptrend.
Fresnillo Cuts Both Ways
Mine supply gave the scarcity argument some ballast. Fresnillo reported attributable silver production of 10.3 million ounces for the third quarter on 21 October, down 11.6% from the same period a year earlier. Lower ore grades and the expiry of the Silverstream contribution were cited as the drivers. The company simultaneously reaffirmed full-year 2026 output guidance of 42.0 to 46.5 million ounces.
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Weaker mine output supports the thesis of constrained supply, though it does not by itself determine the global balance. What investors are left with is a market running on two clocks: the Fed meeting and the rate outlook dominate the weeks ahead, while the months and years will decide which of the wildly divergent deficit forecasts proves right. Near term, silver is drawing relief from fading inflation jitters; the longer recovery remains, for now, an analyst's projection rather than a fact on the tape.
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