Silver settled at $75.83 an ounce on Friday, down 0.50 percent on the day but still up 5.95 percent over the past month. The metal is caught between a narrowing supply deficit and a macroeconomic environment that remains hostile to non-yielding assets. With the May jobs report due on June 5 and a string of other data releases this week, traders are bracing for the next directional catalyst.
The most significant shift in the fundamental outlook comes from the solar industry, where high prices are triggering a structural change in consumption. UBS has reacted by slashing its projected supply deficit for the current year to just 60–70 million ounces, down from a previous estimate of 300 million ounces. The bank cites weaker photovoltaic demand, rising mine production, and a cooling of investment appetite as the driving forces behind the revision.
Silver’s cost burden in solar modules has jumped from 3 percent of total per-watt costs in 2023 to an estimated 17–29 percent today. That escalation has forced manufacturers to accelerate efforts to reduce silver content. Chinese producer Longi Green Energy Technology has announced plans to replace silver with base metals such as copper in back-contact cells. This is not a temporary efficiency tweak — it marks a genuine decoupling of solar capacity expansion from silver demand growth.
Even with the downward revision, the market remains in deficit. The Silver Institute projects a shortfall of 46.3 million ounces for the year, which would mark the sixth consecutive annual deficit. HSBC is slightly more bearish at 73 million ounces, down from 143 million ounces last year. Meanwhile, exchange-traded fund holdings have fallen by nearly 70 million ounces to around 794 million ounces, and speculative net futures positioning has dropped to just over 100 million ounces.
The range of bank forecasts underscores the uncertainty. J.P. Morgan sees an average of $81 an ounce this year. The Reuters median from 30 analysts stands at $79.50. ING forecasts $78, while Citigroup projects $110 for the second half. Bank of America offers a scenario band of $135 to $309. UBS itself has trimmed its year-end target to $80 from $85, and its March next-year outlook now stands at $75, down from $85. HSBC is more cautious with $75 this year and $68 next.
Should investors sell immediately? Or is it worth buying Silber Preis?
The macro calendar is packed with events that could shift sentiment. The ISM manufacturing index hits on June 1, followed by JOLTS job openings on June 2 and the services PMI on June 3. The marquee event is the May nonfarm payrolls report on June 5. All of these data points feed into bond yields and the dollar, which have been the dominant short-term influences on silver.
Technically, the metal is testing its 50-day moving average at $76.01 after Friday’s close just below that level. The relative strength index sits at 58.9, and a negative divergence in oscillators suggests a consolidation phase is underway. Annualized volatility of 57 percent reinforces the choppy trading environment.
The Federal Reserve remains a key headwind. Officials Lisa Cook and John Williams have both signaled caution — Cook left the door open to rate hikes if inflation reaccelerates, while Williams warned of a potential short-term spike to 4 percent. Rising US bond yields and a stronger dollar continue to weigh on silver’s appeal.
Geopolitics offers a counterweight. Reports of a provisional 60-day extension of the US-Iran ceasefire have helped stabilize sentiment, though President Trump’s approval is still pending. Any disruption to shipping or energy infrastructure could fuel oil prices and reignite inflation fears, indirectly supporting safe-haven demand for metals.
In the near term, silver is navigating conflicting forces. A structurally tight market provides underlying support, but the declining silver intensity of solar manufacturing is taking the edge off deficit forecasts. If the ceasefire holds and US data remains stubbornly firm, the metal’s direction will hinge less on demand-side narratives and more on how long the Fed keeps its rate cap in place.
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