Silver Holds Above $60 as Weak Jobs Data and Fed Pivot Meet a Structural Deficit of 46.3 Million Ounces

Silver surges past $60 after soft ADP jobs report and Fed's dovish pivot, amid sixth straight year of supply deficit.

Silver has clawed its way back above the $60 per troy ounce threshold, buoyed by unexpectedly soft US employment figures and a notably more cautious tone from Federal Reserve Chair Kevin Warsh. The move comes against a backdrop of extreme structural tightness in the physical market, where a sixth consecutive annual supply deficit is eating into global inventories.

The rally was ignited by Wednesday’s ADP private-sector payroll report, which showed just 98,000 new jobs added in June — well short of the 113,000-to-118,000 range economists had penciled in. The miss weighed heavily on the dollar, with the Dollar Index sliding to around 101.43. Because silver is priced in dollars, the greenback’s stumble made the metal cheaper for buyers outside the US, triggering fresh demand. The spot price jumped roughly 1.8% to as high as $60.21. A disappointing ISM manufacturing index reading of 53.3, versus a forecast of 54.0, amplified the view that the economy is cooling faster than anticipated.

Speaking at the European Central Bank’s forum in Sintra, Portugal, Warsh added further fuel. He acknowledged that inflation risks had “declined in recent weeks,” a phrasing markets interpreted as less hawkish than feared. Though the Fed chief stressed that price stability remains the priority — with inflation still at 4.2% in May — he also announced a shift in the central bank’s communication strategy. The Fed will abandon its reliance on long-term rate-path guidance in favour of a more data-dependent, flexible approach. That increased near-term policy uncertainty, but for precious metals it was a tailwind.

Meanwhile, the fundamental picture for silver remains exceptionally tight. The latest World Silver Survey projects a supply deficit of nearly 46.3 million ounces for 2026, marking the sixth year in a row that demand outstrips combined mine output and recycling. Industrial offtake — now accounting for roughly 60% of global consumption — is being reshaped by two competing forces. Solar-cell manufacturers are using less silver per panel thanks to efficiency gains, but a new demand driver from artificial intelligence is emerging: data centres and high-performance chips require the metal’s superior thermal and electrical conductivity. The latter is increasingly offsetting the photovoltaic savings, analysts say. Critically, about 70% of silver production comes as a byproduct of copper, lead and zinc mining, leaving the supply side largely unresponsive to silver price signals. New primary silver mines are scarce, locking in scarcity for the foreseeable future.

Yet short-term price action remains hostage to interest-rate expectations. A strong dollar and bond yields hovering near 4.47% have been a persistent drag on the non-yielding metal. Large macro funds took profits aggressively in June, accelerating a sell-off that broke silver’s long-term uptrend. The metal now appears to be building a base in the $57–$60 range. Technical strategists at IG Deutschland identify the $57.90 area as a key support floor, while a sustained move above $60.88 could signal the start of a midsummer recovery.

All eyes now turn to Friday’s official US jobs report. Consensus forecasts point to nonfarm payroll growth of 110,000 to 114,000 and an unemployment rate of 4.3%. Should the data confirm the weakness seen in the ADP release, pressure on the Federal Reserve to ease its policy stance would intensify, providing further support for silver at current levels.