Silver Holds $80.86 as Investors Eye Inflation Data and a Widening Supply Gap

Silver trades near $80.86, buoyed by US-Iran tensions and a sixth year of supply deficit. Key US inflation data this week may determine next move.

Silver opened the trading week with a firm grip on the psychologically important $80 level, changing hands at $80.86 per ounce on Monday morning. The metal has gained nearly 12% since the start of the year, but the rally is being shaped by two very different forces: an imminent wave of US inflation data and a longer-term supply deficit that is now in its sixth consecutive year.

The immediate catalyst for recent price action came from the Gulf region. Reports of confrontations between the US and Iran near the Strait of Hormuz stoked fears of energy supply disruptions, sending investors scurrying into precious metals as a hedge. Diplomatic talks are underway but no agreement has been reached. Rising energy costs could reignite inflationary pressures globally — a scenario that traditionally benefits silver as a store of value.

Underpinning the tactical buying is a structural shortage that shows no sign of easing. The Silver Institute forecasts a global supply deficit of approximately 46 million ounces in 2026. Industrial demand remains the driving force: efficiency gains in the solar industry have slightly tempered that sector’s appetite for silver, but this has been more than offset by booming demand from data centres and artificial intelligence infrastructure. Silver’s high conductivity makes it difficult to replace in high-performance chips and server components. Roughly 70% of global production comes as a by-product of copper, lead and zinc mining, meaning primary supply responds only sluggishly to higher prices.

The technical picture supports a cautiously bullish view. The current price sits about 5% above the 50-day moving average of $77.06, while the relative strength index at around 59 suggests the metal is not yet overbought. Resistance lies in the $82.50–$83.00 area, where the 100-day moving average at $82.36 also converges. On the downside, the first support level is at $78.66, with a firmer floor at $76.20.

The overarching macro trigger this week will be the US inflation data released on Tuesday (consumer prices) and Wednesday (producer prices). Both are seen as key inputs for the Federal Reserve’s monetary path. If the numbers come in below expectations, rate-cut speculation could intensify — a favourable environment for a zero-yielding asset like silver, which gains from both declining real yields and a weaker US dollar. The yield on 10-year US Treasuries has already slipped below 4.4%, providing a tailwind for precious metals relative to fixed-income instruments.

Silver closed the previous week up nearly 6%, though it remains around 31% below its 52-week high of $116.89 set in late January. The current consolidation zone between roughly $79 and $81 is being closely watched. Physical demand from Southeast Asia is offering additional support, with premiums above the global spot price, but the ultimate direction will be set by how the macro environment in the US unfolds — and this week, that means the CPI report takes centre stage.