Silver’s Sharp Sell-Off Masks a Deepening Deficit: Jobs Bombshell Resets Rate Expectations

Silver suffered its steepest weekly decline in months, shedding more than 10% after a blockbuster US jobs report torpedoed hopes for near-term rate cuts. The metal tumbled to $67.96 an ounce on Friday — an 8.3% single-day rout that dragged prices to their lowest since late March. At that level, silver now trades 44% below its all-time high of $121.78 set in January 2026.

The trigger was unambiguous. The May nonfarm payrolls report showed 172,000 new jobs — more than double the 85,000 consensus estimate — while the unemployment rate held at 4.3%. Markets swiftly repriced the Federal Reserve’s trajectory, now factoring in a quarter-point rate hike by year-end. For a zero-yielding asset like silver, higher real rates and a stronger dollar are a toxic combination.

A Calendar Packed With Crosscurrents

The next few days will test whether the sell-off has room to run or is overdone. Wednesday’s CPI print for May, due June 10, will be the first major clue. A stubborn reading would reinforce the higher-for-longer narrative Fed Chair Kevin Warsh has increasingly signalled. Producer prices and weekly jobless claims follow on June 11, along with the University of Michigan’s inflation expectations on June 12. The European Central Bank also meets on June 11, with fresh projections expected to shed light on eurozone policy.

All eyes then turn to the Federal Open Market Committee on June 16-17. The Fed’s benchmark rate currently sits at 3.50%-3.75%, while core PCE inflation lingers around 2.7% — sticky enough to keep any dovish pivot on hold. Edelmetallanalyst Christopher Lewis notes that silver’s near-term direction remains strongly correlated with bond yields; a pullback in the 10-year Treasury yield could provide temporary relief.

Should investors sell immediately? Or is it worth buying Silber Preis?

Technically, the metal is testing a critical support zone between $67 and $68. If that level breaks, further downside is likely. A bounce back above $72, however, would be the minimum signal for a recovery attempt towards the $80 area, according to chart watchers.

Solar Sheds Silver, AI and Data Centers Absorb the Slack

Beneath the macro carnage, demand-side dynamics are shifting dramatically. The photovoltaic industry consumed 186.6 million ounces of silver last year — down 6% — and the Silver Institute projects that figure will drop another 19% to roughly 151 million ounces by 2026. The culprit: silver’s price surge lifted its share of solar cell costs from around 8% to more than 20%, prompting manufacturers like Longi Green Energy and Jinko Solar to accelerate plans for copper-based alternatives.

Copper substitution is not without complications. It increases assembly costs, creates reliability issues and is poorly suited to high-temperature TOPCon cell processes. High-efficiency solar designs will continue to depend on silver for the foreseeable future.

What the solar sector saves, however, is being absorbed elsewhere. The Silver Institute points to booming demand from data centres and artificial intelligence infrastructure. Silver is essential in precision contacts, electrical components and thermal management systems for extreme power loads — a demand driver that shows no sign of slowing.

Structural Deficit Extends to Sixth Year

Despite the price rout, the fundamental supply picture remains tight. The silver market is on track for its sixth consecutive deficit in 2026, estimated at around 67 million ounces. Global supply is expected to hit a decade high of 1.05 billion ounces, with mine production reaching 820 million ounces — but that is still insufficient to cover consumption.

Silber Preis at a turning point? This analysis reveals what investors need to know now.

Physical investment is forecast to jump 20% to a three-year high of 227 million ounces, fuelled by persistent macroeconomic uncertainty and silver’s exceptional run in prior years.

Geopolitical strains add another layer of complexity. Escalating tensions in the Middle East — including a US maritime blockade of Iranian ports — are pushing up energy prices and inflation expectations, further narrowing the Fed’s room to ease.

Forecasts Stretch Well Above Current Levels

UBS sees silver at $85 by quarter-end, $85 again in September, and $80 by December. A separate market observer projects a June trading range of $72 to $88, with a base case of $80 to $85. Those targets imply significant upside from Friday’s close. The relative strength index at 35 already signals oversold conditions, suggesting the selling may be overdone in the near term. For that to translate into a sustained rebound, however, the macro headwinds will need to ease — and the next string of data releases will determine whether that happens.

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