Silver's Sixth Straight Deficit Year Puts the White Metal in the Spotlight

Silver tops $70, up 21% in 30 days, as supply deficits and Fed rate uncertainty fuel gains. Key resistance at $71.50.

Silver bulls have plenty to cheer about as the metal closes in on a milestone that seemed distant just weeks ago. Friday's session saw the price push past the $70-per-ounce threshold, extending a rally that has reshaped the precious metals landscape this month. Thursday's settlement of $70.06 marked a 2.9 percent single-day gain, while the 30-day advance now stands at 21 percent — one of the most forceful monthly moves for the metal in recent memory.

The breakout arrives at a delicate moment for global markets. All eyes are trained on Jackson Hole, where Fed Chair Kevin Warsh is scheduled to speak on Friday afternoon. Traders currently assign only about a one-in-three probability to a September rate hike, yet elevated market rates and inflation running above the 2.0 percent target have kept bond markets on edge. That combination — real-rate concerns mingled with hedging demand — has historically provided fertile ground for precious metals.

A Supply Gap That Won't Close

What separates this rally from earlier spikes is the foundation beneath it. The Silver Institute projects the market is heading for its sixth consecutive deficit year, with an anticipated supply shortfall of 46.3 million ounces. That persistent imbalance between mine output and consumption is drawing institutional money into the white metal in ways that short-term trading narratives alone cannot explain.

Citigroup analysts weighed in on August 14 with a forecast that the structural deficit will persist through at least 2027, citing demand from artificial intelligence, 5G infrastructure, and electric vehicle manufacturing. The World Silver Survey 2025 had already documented a global market deficit of 148.9 million ounces for calendar 2024, with industrial demand hitting a record 680.5 million ounces.

The futures market reflects this tightening picture. The CFTC's Commitments of Traders report for the week ending August 18 showed "Managed Money" net long positions in silver futures climbing by 537 contracts to 11,695 — a modest but telling expansion of speculative bets on higher prices.

The Gold-Silver Ratio Tells a Story

The relationship between silver and its yellow counterpart is also shifting. The gold-silver ratio has compressed from 66.44 to 65.38, signaling that silver is outperforming gold in relative terms. That said, different data providers capture the ratio differently: The Vault Report pegged it at roughly 68 to 1 on August 21, based on silver near $69 and gold at $4,662 per ounce. Either way, historically elevated ratios have long been cited by silver bulls as evidence that the metal remains undervalued against gold.

The optimism extends beyond the metal itself. Desjardins lifted its price target for Aya Gold & Silver from 38 to 55 Canadian dollars on Thursday while maintaining a "Buy" rating, and the shares responded by hitting a fresh 52-week high — a sign that the upward momentum is rippling through the producer complex.

Technical Levels in Focus

OCBC analysts describe the current consolidation near resistance between $70.60 and $72 as constructive, noting that ETF holdings and institutional positioning are being rebuilt from low starting points. A decisive breakout above that zone could open the path toward the 38.2 percent Fibonacci level at $80.30, they suggest. Support sits in the $61.30 to $62 range, with deeper support at $54 to $55.

Retail sentiment mirrors the institutional enthusiasm. A community survey points to potential upside toward $77 within a year, with initial resistance at $71.50. Editors at Der Aktionär see an improved picture on a sustained move above $71.50 and a clearly positive signal above $72.50, with the next target zone stretching between $83 and $85.

The current price sits roughly 14 percent above the 50-day moving average of $61.65, underscoring the velocity of the recent advance. Yet context matters: silver remains about 42 percent below its 52-week high of $121.78, reached in late January, a reminder of the sharp correction that preceded this recovery.

Saxo Bank data shows precious metals — led by silver, gold, and platinum — were the strongest commodity segment in August with a sector gain of around 15 percent, as investors rotated out of energy names ahead of the Jackson Hole address. For the weeks ahead, the tone of Warsh's remarks and the bond market's reaction will likely determine whether silver can hold above $71.50 and extend its remarkable run.