Silver's 4% Slide Puts Rate Fears Back in the Driver's Seat

COMEX silver settled at $64.93 an ounce, down 4.0%, as hawkish Fed expectations lifted Treasury yields and traders locked in gains.

A fresh wave of speculation about additional Federal Reserve tightening knocked silver off its stride this week, with the metal surrendering ground at both the spot and futures levels as traders moved to lock in profits.

COMEX silver settled Wednesday at $64.93 an ounce, a daily loss of 4.0%. The selling spilled into Asian hours, where quotes dipped to roughly $64.10 an ounce before steadying, according to media reports. Gold and other precious metals absorbed similar pressure, a sign that the pullback stemmed from broad macro repositioning rather than anything specific to silver's own supply-demand picture.

At the heart of the retreat is the opportunity cost math that governs non-yielding assets. Firm US economic releases have revived expectations that the Fed could push rates higher still, lifting Treasury yields and making bullion and its peers less attractive to hold. Dealers note that rate uncertainty in the US has repeatedly triggered swift reversals in direction, and the latest round of hawkish bets prompted investors to trim exposure and bank gains.

Data Calendar and Diplomacy Keep Traders Cautious

Attention now shifts to a pair of US releases that could reset the rate and dollar calculus. Friday brings durable goods orders, followed on September 30 by PCE inflation — the Fed's preferred price gauge. How those prints land will shape positioning across commodity desks in the weeks ahead. Adding to the cautious mood, an upcoming US-China summit is being watched as a near-term macro variable that has injected extra hesitation into raw materials markets.

The near-term direction, then, hinges largely on incoming US inflation figures and the trajectory of interest rates. Yet the multi-year backdrop remains considerably sturdier than this week's price action suggests. Silver still commands a 44% gain over the past twelve months, even after the recent wobble, and quotes have spent recent weeks oscillating within a broader sideways range.

Supply Constraints Meet a Cooling Solar Sector

Structural forces continue to underpin the physical side of the market. Because silver emerges largely as a by-product of industrial metal mining — copper, lead and zinc — as well as gold extraction, mine output responds only sluggishly to price swings, keeping supply tight.

That rigidity matters as demand signals diverge. The Silver Institute expects overall industrial demand to contract by 2%, and the solar sector has shown softer offtake of late. With photovoltaics ranking among the metal's largest industrial consumers, that cooling adds to the monetary headwinds weighing on sentiment.

Forecasts for 2026 point to a market deficit, with estimates ranging from about 46 to 67 million ounces depending on the source — the Silver Institute and organizations such as Metals Focus among them. Those structural shortfalls have so far proved insufficient to offset the selling pressure generated by rate anxiety and industrial caution.

On the analyst front, Julius Baer took a neutral stance on the metal on September 14, setting price targets of $65 over three months and $67.50 over twelve months.