Silver's $59 Nosedive: A Hawkish Fed and Thawing Tensions Trump a Deepening Supply Squeeze
29.06.2026 - 17:45:40 | boerse-global.de
The sell-off in silver has gathered pace, with the metal now trading at its lowest level in months. September futures opened Monday at $59.30 per ounce, slipped 0.6% from Friday's close, and quickly fell to $58.78 in early electronic trading. The decline extends a brutal June that saw the price plunge 22%, pushing the year-to-date loss to around 18%. From the all-time high of $121.62 reached on January 29, 2026, silver has now forfeited roughly 47% of its value.
Two powerful headwinds are driving the rout. First, the Federal Reserve's hawkish posture continues to weigh heavily on non-yielding assets. Fed Chairman Kevin Warsh has reiterated the central bank's commitment to curbing inflation, which stood at 4.2% in May. Nine of the Fed's 18 members anticipate at least one more rate hike this year. Bank of America is even more aggressive, forecasting three additional quarter-point moves in September, October, and December—a total of 75 basis points. Deutsche Bank expects two steps. For an asset like silver, which generates no interest, rising rates create a punishing opportunity cost. The dollar index, meanwhile, is hovering near its one-year high, making dollar-priced silver more expensive for overseas buyers and adding to the metal's woes.
Second, the safe-haven premium that supported silver in prior weeks is evaporating. Diplomats are due to meet in Doha on Tuesday to de-escalate the conflict over shipping lanes in the Strait of Hormuz. As geopolitical tensions ease, investors are rotating out of perceived havens and back into yielding assets. Institutional money has been flowing into bonds, divorcing the paper market from physical realities—at least for now.
Should investors sell immediately? Or is it worth buying Silber Preis?
Those physical realities remain remarkably tight. According to the World Silver Survey 2026 from the Silver Institute, the market is facing its sixth consecutive annual supply deficit. The institute estimates a shortfall of 46.3 million ounces this year, 15% larger than last year's deficit. Cumulative inventory drawdowns since 2021 have reached 762 million ounces, equivalent to a full year's global mine production. COMEX silver inventories stood at roughly 82 million ounces in mid-June—a thin buffer against any sudden demand spike.
Yet the market is ignoring these fundamentals. The gold-to-silver ratio closed the week at 69.3:1, near its highest level since the Iran war. Historically, readings above 80 have signaled that silver is undervalued relative to gold, but the ratio remains far from that threshold. The disconnect suggests that near-term macro forces—rate expectations and dollar strength—are overriding supply constraints.
Attention now turns to the U.S. jobs report for June, due Thursday—a day earlier than usual because of a public holiday. Economists expect 172,000 new positions. A stronger-than-forecast reading would reinforce the Fed's hawkish stance and likely drive silver lower. Chairman Warsh is also scheduled to speak at a conference in Portugal on Wednesday, offering another potential catalyst.
Underpinning the longer-term picture is the persistence of inflation. The core PCE price index rose to 3.4% in May, the fastest pace since October 2023. The Fed has now missed its 2% target for 63 consecutive months. Whether this inflation proves structural or transitory will determine the trajectory of rate hikes—and, by extension, the direction of silver prices. For now, the paper market insists on looking past the deficit.
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