Silver’s 21% June Slump Triggers Technical Sell Signals as UBS Slashes Outlook to $80

Silver falls 21% in June, breaking technical support amid geopolitical turmoil, inflation surge, and Fed tightening. Key support at $61-60; structural supply deficit of 46.3M oz persists.

Silver has suffered one of its steepest monthly declines on record, shedding more than 21% in June alone to trade at $64.45 an ounce. The rout has punched through key technical levels — the 10-day simple moving average has crossed below the 20-day SMA, a classic bearish signal, while the relative strength index sits at 32, hovering just above oversold territory but offering no clear reversal cue. The next major support floor lies between $61 and $60; a breach there would open the path toward $54, a former double-top, and a break of the $50 mark would threaten the metal’s long-term uptrend. For now, any meaningful relief would require a recovery above $67.80, a threshold that looks distant.

The sell-off has been fueled by a toxic mix of geopolitical turmoil and monetary tightening fears. U.S. military strikes on Iranian air-defense systems and retaliatory missile attacks on American bases have sent oil prices soaring, feeding a fresh inflation scare. U.S. consumer prices rose 4.2% in May — the highest annual reading since April 2023 — while core inflation climbed to a seven-month peak. The Federal Reserve is now widely expected to keep raising rates, with the CME FedWatch Tool assigning a greater than 70% probability of further tightening through the end of 2026. The yield on the 10-year Treasury note has stabilized above 4.5%, making zero-yield bullion increasingly costly to hold.

Layered on top of that is a dire short-term sentiment shift. “Investment appetite has evaporated and industrial buying is softening,” analysts at UBS noted as they slashed their silver price forecasts. The bank now expects the metal to trade at $85 by the end of this month and to slide further to $80 by year-end. That is a stark comedown from the record high of $121 struck in January, though silver remains in the black on a year-to-date basis.

Yet the structural picture tells a very different story. The global silver market is heading into a sixth consecutive year of supply deficit, now standing at 46.3 million ounces. While solar panel manufacturers — historically a major demand driver — reduced their silver consumption by 6% due to the metal’s elevated costs, demand from data centers and electric vehicles has kept overall industrial usage buoyant. On the supply side, the outlook is constrained: roughly 70% of silver output is a by-product of copper, lead and zinc mining, and declining ore grades combined with a lack of new mine projects are capping production. Coeur Mining this week reiterated its annual production guidance of 18.7 million to 21.9 million ounces, a modest figure that underscores the broader capacity squeeze.

Recycling offers little relief given limited global refinery capacity, while financial investors and exchange-traded fund buyers continue to absorb the available material, locking in the deficit for the foreseeable future. For now, however, the macro headwinds are overwhelming those bullish fundamentals. The market’s attention remains fixed on interest rates and inflation, and until those clouds lift, silver’s near-term path looks set to stay heavily tilted to the downside.