Silver's $76 Floor Tested by Hawkish Fed, Iran Stalemate, and India's Import Squeeze

Silver's six-year structural deficit clashes with a hawkish Fed, a strong dollar, and weakening demand from India and solar, keeping prices range-bound near $75.

Silver is caught between a rock and a hard place. The metal's structural deficit is now in its sixth consecutive year, with cumulative withdrawals from above-ground inventories exceeding 762 million ounces since 2021. Yet the price is struggling to hold the $76 level, dragged down by a resurgent dollar, fading hopes of a diplomatic breakthrough with Iran, and emerging cracks in demand from India and the solar panel industry.

The immediate catalyst for the latest leg lower came from the Federal Reserve. Minutes from the last FOMC meeting confirmed that policymakers stand ready to raise rates further if inflation stays elevated. Markets have priced in a better-than-55% probability of another hike. A firmer dollar index has followed, making silver more expensive for non-US buyers, while rising bond yields sap the appeal of non-yielding assets.

On the geopolitical front, expectations of a US-Iran détente have soured. Reports emerged that Iran's Supreme Leader, Ayatollah Mojtaba Khamenei, issued a decree mandating that all enriched uranium remain on Iranian soil — a move traders interpreted as a major hurdle to President Trump's proposed deal. The relief rally that had lifted silver earlier this month on optimism over a possible agreement quickly reversed. On Thursday, the metal briefly slipped below $75 before stabilizing just above that mark on Friday.

The macro headwinds are compounded by demand-side weaknesses that could dent the bullish narrative. India, one of the world's largest silver consumers, has imposed new import restrictions on precious metals. Meanwhile, the photovoltaic industry — a key growth driver for silver over recent years — is expected to cut its offtake again in 2026, following a weaker 2025. Both factors threaten to shrink the projected deficit, which analysts have pegged at between 46 million and 67 million ounces for the year.

Technicians see a critical support zone between $73.80 and $74.20. As long as silver stays above $74.20, targets at $76.12 and $78.84 remain within reach. A breakdown below $73.80, however, would open the door to further selling. The level takes on extra significance given that physical industrial buyers have been providing a floor near $75, according to traders.

The April US consumer price index, which came in at 3.8% — above expectations — has only reinforced doubts about near-term Fed easing. Ten-year Treasury yields, which briefly fell to around 4.57% on Iranian deal optimism on May 20, have since recovered, putting fresh pressure on silver. The metal climbed over 140% in 2025 and hit an all-time high of $121.64 in January 2026, but is now roughly 35% off that peak.

For now, the tug-of-war between a structural supply shortfall and a challenging macro backdrop looks set to persist. Until the Fed signals a clearer direction on rates — or the Iran talks show concrete progress — silver may remain stuck in a range, testing the patience of both bulls and bears.