Not even missiles over Iran could lift silver on Monday. The white metal slipped another 0.5 percent to $67.47 per troy ounce, extending a sell-off that has wiped nearly 10 percent from its price in a single week and left it trading more than 44 percent below the 52-week peak of $121.78 reached at the end of January. The usual safe-haven bid simply failed to materialize.
The disconnect is stark. Oil surged more than $4 a barrel after Israel launched strikes against military targets in western and central Iran. Historically, such a spike alongside geopolitical turmoil would provide a clear tailwind for precious metals. Instead, the move played out through a different channel — higher oil feeding inflation expectations, which in turn reinforced the case for tighter Federal Reserve policy. Gold also felt the pressure.
Jobs data reshapes the rate calculus
What is really moving silver right now are US interest-rate expectations. Friday’s employment report showed the economy added 172,000 nonfarm jobs in October, while the unemployment rate held at 4.3 percent. More importantly, the prior two months were revised higher by a combined 93,000 positions, giving the Fed more ammunition to keep policy restrictive. Markets now price a 72 percent probability of a rate hike in December, according to Reuters data.
For a non-yielding asset like silver, rising bond yields are anathema. Long-term Treasury yields pushed further higher, making fixed-income instruments relatively far more attractive. The metal’s dual nature — part precious, part industrial — compounds the problem. In an environment where higher rates could slow economic activity, the industrial component acts as a drag that gold does not share.
Physical tightness versus macro gravity
The fundamental picture is anything but straightforward. The Silver Institute’s latest report put global silver demand at 1.13 billion ounces last year, down 2 percent year-on-year. Industrial consumption fell 3 percent to 657.4 million ounces, with weakness in photovoltaics, electronics, and substitution effects as manufacturers optimized usage — or switched to alternatives — in response to elevated prices.
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Yet investment demand for coins and bars jumped 14 percent in 2025, and the Institute forecasts a further 18 percent gain this year, even as total demand is seen contracting another 2 percent and industrial use slipping an additional 3 percent. With mine production set to remain stable, the market is expected to post a structural deficit of 46.3 million ounces — the sixth consecutive year of a supply shortfall. On paper, that should offer substantial support.
In practice, the macro headwind has overwhelmed that argument for now. The relative strength index has fallen to 35, a level that typically suggests oversold conditions, but traders see no clear catalyst for a reversal as long as rate expectations and a firm dollar dominate the narrative.
China’s import surge — a key test
Early this year, China registered unusually high silver imports, driven by industrial buying and investment demand, especially from the solar sector. That provided a glimmer of physical strength beneath the surface. The question now is whether that momentum can be sustained.
If import data weaken in coming months, it would reinforce the bearish industrial narrative and deepen the metal’s slide. Robust numbers, however, would suggest that the physical market is healthier than the price action implies and could eventually provide the floor investors are looking for.
For the moment, the tug-of-war is one-sided. Macro drivers — interest rates, the dollar, and industrial growth expectations — have overpowered geopolitical risk, tight supply, and even rising oil prices. Until the rate outlook shifts, silver’s physical scarcity remains a story waiting for its moment.
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