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(MENAFN- Your Mind Media ) Silver is trading ar–und $63–64 per ounce after failing to sustain’last week’s recovery toward $68. Over the past month, the price has fallen by more than 3%, although it remains approximately 53% higher than a year ago. More notably, silver is now nearly 50% below the record high of $121.60 set in late January. This suggests that the market has moved beyond the sharp rally seen at the beginning of the year and is returning to reflect more cautious fundamentals.
One of the main sources of pressure is the renewed surge in oil prices above $100 per barrel, which has heightened inflation concerns, while the 10-year U.S. Treasury yield has climbed to its highest level since 2007. This has reinforced expectations that the Fed will raise interest rates by another 25 basis points and may continue to maintain tighter monetary policy for longer. A stronger U.S. dollar and higher yields increase the opportunity cost of holding silver, thereby limiting the support provided by geopolitical tensions.
Compared with gold, silver faces additional pressure because of its role as an industrial metal. Global industrial demand is forecast to decline by approximately 3% this year to 639.6 million ounces, marking a second consecutive annual decrease. The weakness is mainly attributable to the solar industry, where manufacturers continue to reduce the amount of silver used in each cell and gradually shift toward lower-cost materials. Demand from electric vehicles, data centers, AI, and electronic devices continues to grow, but has so far offset only part of the decline in photovoltaic demand.
Nevertheless, the market is still projected to record a deficit of approximately 46.3 million ounces in 2026, marking a sixth consecutive year of shortfall. Since 2021, supply failing to keep pace with demand has resulted in approximately 762 million ounces of silver being withdrawn from inventories. This indicates that physical supply remains relatively tight and continues to provide underlying support for prices over the medium term.
However, a supply deficit does not mean that prices will immediately begin rising again. A portion of above-ground silver inventories can still be mobilized to cover the supply–demand gap, while elevated prices are encouraging recycling and weakening demand for jewelry and silverware in price-sensitive markets such as India. In other words, the current deficit is providing a price floor rather than acting as a sufficiently strong catalyst to drive a new rally.
In the near term, the outlook for silver will depend primarily on the F’d’s policy guidance. If the U.S. central bank signals that further rate increases remain possible or that tighter monetary policy will be maintained for longer, elevated yields and a stronger U.S. dollar could keep silver under pressure. Conversely, a more dovish stance than expected would create conditions for capital to return to precious metals and help prices recover.
In my view, si’ver’s long-term fundamentals remain relatively positive, supported by the prolonged market deficit and demand from emerging technology industries. In the current environment, however, these factors are not yet strong enough to outweigh the pressure from interest rates and weakening industrial demand. Silver may remain highly volatile, but the prospect of a sustainable uptrend will become clearer only when U.S. Treasury yields begin to ease and investment flows return to the market.

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