Silver Split Between Geopolitics and Supply Tightness as Price Slips to 56.61
Published on 07/17/2026 at 04:00 | Redaktion boerse-global.de
Silver is being pulled in two directions at once: a volatile macro backdrop is weighing on the metal right now, while the longer-term supply picture still points to a market shortfall. On Thursday, the price fell 1.19 percent to 56.61 US dollars from 57.29 US dollars a day earlier, even as other precious metals moved differently. Platin jumped 1.75 percent to 1,661.00 US dollars, while palladium held steady at 1,291.50 US dollars.
The latest weakness in silver comes as traders juggle several pressure points at once. A stronger dollar, firmer oil prices and renewed talk of higher US interest rates have all worked against the metal, which does not pay interest and tends to suffer when borrowing costs look set to rise. FXStreet said silver dropped sharply on 16 July, while BullionVault described the move as an eight-month low.
Energy markets have been a major part of the story. The war risk tied to the Middle East has intensified, with the US Air Force striking Iranian targets for six nights and Tehran responding with missiles against US bases in Jordan, according to Channel NewsAsia. Shipping through the Strait of Hormuz has largely ground to a halt, and Iran is also threatening to block Bab al-Mandeb. The International Energy Agency warned on Thursday that a possible oil shock linked to a Hormuz blockade could endanger the global economy.
Oil prices have responded unevenly but remain elevated. Energy News reported WTI at just under 79.40 dollars a barrel, while other reports put Brent at around 86 dollars. Separate market data on Thursday showed Brent easing to 84.62 US dollars from 84.95 US dollars a day earlier, with WTI down 0.15 percent to 79.48 US dollars. Either way, energy costs are high enough to revive inflation worries.
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That in turn has sharpened focus on the Federal Reserve. According to MarketScreener, Fed Vice Chair Jefferson said the central bank may have to raise rates if price pressure tied to the Middle East conflict and higher energy costs does not ease soon. Logan of the Dallas Fed said she does not currently see wage-driven inflation pressure, but still argued for a slightly higher policy rate to cushion risks. Silver’s sensitivity to the dollar and to rate expectations has left it more exposed than other metals.
Chart signals also remain weak. FXStreet said silver is trading below its 50-day, 100-day and 200-day moving averages, a setup that points to persistent downside pressure. Gold has been hit too, with reports showing it dropping below 4,000 dollars per ounce for the first time in months.
Yet the underlying market balance still looks tight. Analysis cited by discoveryalert.com.au suggests the global silver market will post a sixth straight annual deficit in 2026, this time amounting to 46.3 million troy ounces. The Silver Institute offers the same deficit estimate and says mine output is likely to stagnate. JPMorgan, as cited by discoveryalert.com.au, sees silver at 81 dollars per ounce by year-end, while the London Bullion Market Association projects 79.57 dollars.
The demand picture is split. The Silver Institute expects coin and bar demand to rise 18 percent, but industrial use to fall 3 percent, partly because of weaker consumption in photovoltaics. Overall, it forecasts total demand will decline by about 2 percent.
Trade policy is adding another layer of uncertainty. A yearly review of the USMCA agreement began in early July, and the US rejected a 16-year extension, according to IndexBox and FXEmpire. That matters for silver because Mexico is a major supplier, producing 172.9 million troy ounces in 2025, or about a fifth of global output. A separate tariff decision on copper is also pending; a report was due at the end of June, and a 15 percent duty could take effect from January 2027. Copper inventories at COMEX have already climbed from 80,000 to 650,000 tonnes, which IndexBox said points to market participants preparing for regulatory changes.
India has also become a pressure point. After tighter import rules, silver imports in May 2026 collapsed to 46.8 tonnes from 534.3 tonnes in May 2025. That shift does not change the near-term price action, which is still being driven by futures-market moves, but it could reshape the global supply-demand balance over time.
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Meanwhile, miners are still pushing ahead with projects that could affect future supply. Aya Gold & Silver said by mid-July it had completed 102,111 drill metres this year, with a target of 180,000 metres. The Boumadine feasibility study is on schedule, with an updated economic assessment due in the second half of 2026 and the full feasibility study expected in 2027. A contractor shortlist is already under way for the planned open-pit operation, and a construction partner is due to be chosen by year-end.
In Alaska, Valhalla Metals resumed drilling at the high-grade Sun project after closing a 15 million Canadian dollar financing in June. The resource there includes 60 grams of silver per tonne, while the nearby Smucker project grades even higher at 164 grams per tonne.
The mining sector’s share prices have reflected the strain. Vizsla Silver was among the weaker North American silver names on 16 July. The company secured a 173 million Mexican peso credit facility in May to cover operating costs at its Panuco project, a supplementary financing package rather than a fundamentally new project funding arrangement.
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