Silver, trading below $65 an ounce, has been one of the sharpest casualties of the shift in the monetary regime. Having run spectacularly higher over the prior year, the metal has reversed hard, shedding roughly a fifth of its value from its post-Fed peak, and the near-term bias remains to the downside while real interest rates climb.
The dominant driver is the same one weighing on gold: a hawkish Federal Reserve. The central bank held rates in a range of 3.50% to 3.75% but signalled that around half of its officials see a hike this year, pushing real yields and the dollar higher. For a non-yielding asset like silver, that raises the opportunity cost of holding it. Because silver tends to amplify gold's moves in both directions, it has fallen harder than its larger counterpart.
The fading war premium compounds the pressure. The near-final US-Iran peace deal and the slump in oil have eased the inflation fears that had supported precious metals, removing a key prop. On top of that, the metal faces its own specific headwinds: at least one major bank has trimmed its forecast for silver investment demand, citing softer industrial appetite and rising supply, and India has moved to curb silver imports to ease pressure on its currency, dampening a source of physical demand.
It is important, though, to respect the other side of the ledger. Silver's longer-term story rests on a structural supply deficit and robust demand from the solar and electric-vehicle sectors, which many analysts believe will limit the downside and prevent a deep, prolonged collapse. This looks like a sharp cyclical correction within a longer structural uptrend rather than the end of the bull case.
As an illustrative, educational example of how the near-term bias might be framed, a methodical approach would lean on fading corrective bounces rather than chasing the metal lower: an example entry zone around $66.50 to $68.50, a worked objective toward $60.00, and invalidation on a daily close back above roughly $72.50, which would suggest the corrective pressure has eased. These figures are a worked example to illustrate the idea, not a recommendation, and silver's high volatility makes position sizing especially important.
The variables to watch are real yields and the dollar, which are the primary near-term drivers, next week's US inflation data, and any signals on industrial demand. A dovish shift or falling real yields would quickly re-energise silver's structural bid; until then, the path of least resistance runs lower.