Silver’s Death Cross Deepens as Rate Fears Eclipse Geopolitical Tensions and Supply Deficit

Silver drops 1.7% as death cross signals further losses. Hawkish Fed, easing Iran tensions, and industrial slowdown threaten $60 support despite structural supply deficit.

Silver extended its slide on Wednesday, slipping to around $64.24 an ounce — a 1.7% drop in 24 hours — after a turbulent session that saw prices bounce from $65 to $68 the day before. A bearish death cross pattern has materialized on the charts, with the short-term moving average falling below its longer-term counterpart, a signal that traders often interpret as a precursor to further losses.

The precious metal is facing a three-pronged assault: hawkish rate expectations in the U.S., an easing of Middle East tensions that normally would support safe havens, and a technical breakdown that has put the next psychological support at $60 in play. US attacks on Iran, triggered by the downing of a military drone over the Strait of Hormuz, failed to ignite a typical flight into hard assets. With roughly half of silver demand stemming from industrial applications, anxiety over a potential economic slowdown is overriding its crisis-metal appeal.

Fundamentally, the market remains structurally tight. The Silver Institute projects a sixth consecutive supply deficit in 2026, with demand exceeding supply by about 46 million ounces. But the narrative is nuanced. The photovoltaic sector is expected to cut silver consumption by roughly 19% next year to 151 million ounces as manufacturers use less material per cell — a practice known as “thrifting.” On the other side, the boom in data centers and AI hardware continues to lift industrial offtake, though total industrial demand is forecast to ease 2% to around 650 million ounces. Mine output is edging higher, reaching an estimated 820 million ounces, while physical investment demand is absorbing some of the excess.

The technical backdrop has worsened sharply since silver peaked above $100 earlier in the year. The death cross, combined with elevated real yields in the U.S. that make non-yielding assets less attractive, has traders bracing for a test of the $60 threshold. Wednesday’s U.S. inflation data, followed by producer prices on Thursday, will be pivotal — any upside surprise could reinforce the Federal Reserve’s restrictive stance and trigger another leg down. Conversely, a softer reading might redirect attention to the underlying supply deficit and provide a floor under prices.