Silver Closes Above $70 as Hawkish Fed Rhetoric Meets a Supply Squeeze
Published on 08/29/2026 at 08:03 | Editorial boerse-global.de
Silver finished Thursday's session at $70.06 per ounce, up 2.9 percent on the day — a resilience that looks all the more striking given the headwinds blowing from Jackson Hole. Federal Reserve Chair Kevin Warsh used his first major address since taking office in May to strike a distinctly hawkish tone, warning that inflation is not cooling fast enough and that the central bank "still has work to do."
That message landed hard on rate expectations. According to the CME FedWatch tool, the probability of a September hike jumped from roughly one-third to as much as 58 percent. Two-year Treasury yields climbed from 4.22 to 4.30 percent, while thirty-year bonds yielded 5.19 percent. Gold took the brunt of the repricing, slipping below $4,450 at one point on Friday after having traded north of $4,600 earlier in the week. Silver initially followed suit, shedding more than 4 percent at its worst and trading in a $66-to-$69 range before recovering.
What sets silver apart from its yellow-metal cousin, analysts note, is the industrial demand anchor. That structural support has helped the white metal shrug off the interest-rate scare that rattled gold, allowing it to close the week above the psychologically important $70 mark.
Supply Disruptions Add to the Bull Case
The macro picture is only half the story. On the supply side, production snags across Latin America are tightening the physical market. Mexico, Peru, and Chile — which together account for roughly 40.9 percent of global output — all saw August production hit by separate disruptions: a twelve-day blockade at Mexico's Terronera mine, a 9.0 percent drop in silver yields from Peruvian ores due to lower zinc content, and an unusual snowstorm in Chile.
Estimates put the combined production loss at around 1.1 million ounces. That shortfall lands in a market where the gold-silver ratio sits at approximately 66.8, a level suggesting silver remains historically cheap relative to gold — even after a 76 percent run-up over the past twelve months.
The physical picture is nuanced, however. COMEX inventories stood at 338.2 million ounces, split between 99.2 million ounces in registered status and 239.0 million ounces eligible. Warehouse levels were essentially flat from the prior report, which suggests the current rally is being driven more by hedging and safe-haven demand than by an acute shortage at the vaults.
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August's Steady Climb
The weekly gains have been anything but volatile. During the week of August 17–21, silver advanced 6.6 percent to close at $68.97 per ounce, with market commentary at the time grouping the metal alongside gold and WTI crude as notable gainers. The momentum carried into the following days: spot prices held at $68.74 on Monday, matched that level on Tuesday, and inched up to $68.895 by Thursday before the more decisive breakout.
August has been a banner month overall, with silver up 21 percent — a steady ascent that contrasts sharply with the wild swings seen mid-month, when the price moved by more than five dollars in a single session.
What Comes Next
Sentiment among professional investors remains constructive despite the recent turbulence. A survey of Wall Street participants found 48 percent bullish on precious metals, 29 percent bearish, and the remainder neutral. Retail investors were even more optimistic, with 59 percent expressing a positive outlook.
All eyes now turn to next week's US employment data, which — combined with the Fed's September 15–16 meeting — will determine whether Warsh's hawkish stance translates into an actual rate increase. Notably, three of twelve Fed members are already pushing to delay the decision.
Technically, silver remains firmly in a medium-term uptrend. The RSI reads 67.3, hovering near overbought territory, but the metal's distance from its 50-day moving average of $61.65 points to intact momentum. The coming weeks will test whether silver can hold its role as an inflation and debt hedge even as the Fed signals a more restrictive path — and whether the white metal's industrial backbone can continue to absorb the monetary policy shock.
