Silver Climbs Back Above $66 as Oil Slump Eases Rate Pressure — and a 46.3-Million-Ounce Deficit Lurks Beneath

Silver settled Friday at $66.78 an ounce, up 1.6%, as softer crude and lower Treasury yields trimmed the cost of holding the metal.

A sharp retreat in crude prices handed silver a rare stretch of relief to close the week, with the metal pushing back above the $66 threshold as energy-led disinflation hopes bled into the US bond market.

The front-month contract settled Friday at $66.78 an ounce on the COMEX, a gain of 1.6% on the day. The move extended a rebound that traders attributed largely to the tandem of softening oil and a calmer Treasury market — a combination that trims the opportunity cost of holding a metal that pays no coupon.

The tailwind arrived from an unexpected quarter. Saudi Arabia signaled it would explore additional energy-export options, according to media reports, a disclosure that triggered an immediate correction in oil and, in turn, pulled US government bond yields lower. The easing in fixed-income markets gave the non-yielding metal room to breathe after weeks of rate-driven turbulence.

A Rebound With a Short Leash

The recovery has carried silver back above its near-term trend lines, leaving it 3.8% above its 50-day moving average. A separate reading of the same gauge put the metal 5.1% clear of that level following a stronger session earlier in the week, when prices jumped 2.9% to $67.64 an ounce.

Yet the advance has run into a familiar ceiling. The Federal Reserve's rate hike last Wednesday has kept the dollar firm, capping upside for dollar-denominated commodities. Traders are also keeping a close watch on exchange warehouse inventories, where "registered" stocks available for immediate delivery have slipped below the 100-million-ounce mark.

The path to Friday's close was anything but smooth. On September 10, silver fell from $67.31 to $66.68 an ounce, a daily loss of 0.93%, before unexpectedly hot US inflation data on September 11 piled further pressure on the market. With monetary policy decisions looming, the trading environment proved highly sensitive to rapid shifts in direction as participants repeatedly repriced interest-rate risk.

The Deficit Story Refuses to Fade

Beneath the day-to-day noise, the supply-and-demand picture is shifting in ways that could prove more durable than any single session's move. The Silver Institute expects the global market to run a deficit of 46.3 million ounces, even as photovoltaic demand is projected to fall 19%.

Overall industrial consumption is seen holding steady at an estimated 639.6 million ounces, with fresh demand emerging from artificial-intelligence data centers, electric-vehicle manufacturing and the worldwide buildout of grid infrastructure. The World Silver Survey, cited by Reuters, forecasts physical investment demand climbing to 227 million ounces — a roughly 20% increase in bars and coins that would largely offset cutbacks elsewhere in the industrial complex and a decline in silverware.

That leaves the market wedged between two opposing forces: the weight of a hawkish Fed and the pull of a structural supply shortfall. For now, the metal's ability to hold above $66 has bought it breathing room from the deeper support levels that came under threat during 2026's steep correction — when, as one news agency warned at the time, a break below those marks risked unleashing another wave of selling. Whether the reprieve lasts hinges on whether the relief from US yields sticks, or whether renewed rate anxiety drags silver back toward the floor.