Silver briefly sank to $74.62 an ounce on Wednesday — an intraday loss of as much as 3% — before stabilising around $76.97, still 1.4% lower on the day. The decline extends a multi-day retreat that pulled the metal below $78 after a stronger start to the week. Yet beneath this paper-market slide, physical demand is flashing numbers that border on the surreal.
The immediate trigger was a fresh round of US airstrikes on rocket positions and boats in southern Iran, which sent geopolitical risk premiums oscillating violently. Tehran accused Washington of violating existing ceasefire agreements, while reports emerged that Iranian Revolutionary Guards are sourcing satellite communications through third countries and establishing a new authority to oversee transit in the Strait of Hormuz. Typically, such headlines would drive safe-haven flows into precious metals. This time, the fear of disrupted trade routes and the inflationary fallout from higher energy costs are overwhelming that impulse.
The Federal Reserve’s leadership change is compounding the confusion. Kevin Warsh has taken the helm, and markets are now debating whether the central bank will face greater political pressure — with some analysts drawing parallels to the stagflation era of the 1970s. US consumer confidence slipped to 93.1 points in May, and the May 28 release of PCE inflation data will be the next major cue for rate expectations. The market currently assigns roughly a 40% probability of a 25-basis-point rate hike by year-end. Higher opportunity costs hit non-yielding silver disproportionately, which explains why the metal cannot capitalise on geopolitical tension.
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A very different story is unfolding in the physical market. The Royal Mint reported that sales of silver bars surged 1,000% in the 2025/26 fiscal year. Even more striking, customer buybacks soared 3,300%, online transaction volumes jumped 130%, and 60% of active clients are now first-time buyers. On the supply side, Silver One Resources announced on May 27 an expanded drilling campaign at its Candelaria project in Nevada, totalling up to 25,000 metres. The first reverse-circulation plant is slated to start at the end of May, with a second unit to be mobilised in mid-July.
Technically, the short-term outlook remains fragile. The 50-day moving average at $75.87 is the immediate support, and a break below that would keep the consolidation intact. Resistance is pegged at the 100-day moving average of $81.42; only a decisive push above that level would relieve the bearish pressure. Over the past week silver has still managed a 4% gain, but the three-month picture shows a 13% decline. The year-on-year gain stands at roughly 129%, a reminder of the extraordinary rally that pushed the metal to an all-time high above $121 in January 2026.
The gold-silver ratio has widened to 59.47 from 58.53 on Monday, reflecting silver’s faster erosion relative to gold. That divergence stems from silver’s dual role as both a monetary and an industrial metal, making it more sensitive to macroeconomic shifts. Asian trading hubs, Vietnam among them, saw a marked increase in supply that weighed on both bar and industrial contracts. With the metal now trading in the $76–$78 corridor, the next directional clue will come from US economic data — particularly inflation prints that will either hasten or postpone a policy pivot. Until then, paper silver and physical silver are telling two almost opposite stories.
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