Silver Holds Above $76 as Lower Yields Counter Firmer Dollar, But India and PV Clouds Gather

Silver rebounds to $76.66 as lower crude and Treasury yields offset a firmer dollar, but structural deficit and demand risks from India and solar keep outlook volatile.

Silver mounted a brisk recovery on Thursday, climbing to $76.66 an ounce — a gain of 1.03% — even as the US dollar strengthened. The white metal had briefly dipped to $74.44 during the session before rallying to a high of $77.12, with spot prices hovering near $76.64 the following day.

The turnaround was orchestrated by a tandem decline in crude oil and US Treasury yields, which neutralised headwinds from a firmer greenback. Early Thursday, tensions in the Strait of Hormuz had dragged silver to around $75.07. But markets quickly reassessed the likelihood of progress in US-Iran negotiations, sending Brent to a range of $105–108 a barrel and WTI to $99–102. At the same time, the yield on the benchmark 10-year US Treasury note slipped to roughly 4.6%, after moving between 4.57% and 4.6% in recent sessions on optimism surrounding President Trump’s pursuit of an Iran deal. Lower yields reduce the opportunity cost of holding non-interest-bearing assets like silver.

The macro backdrop remained inconclusive. Initial jobless claims edged down to 209,000, but the Philadelphia Fed manufacturing index collapsed from 26.7 to minus 0.4 — a severe contraction. In contrast, the ISM manufacturing PMI printed at 55.3, pointing to expansion. This mixed bag left rate expectations muddled, particularly after the April consumer price index came in at 3.8%, above forecasts, fuelling doubts about an early Federal Reserve rate cut.

Underneath the short-term price action, the structural story is more complex. The silver market has recorded supply deficits for six consecutive years, depleting over 762 million ounces from above-ground inventories since 2021. Analysts project another shortfall in 2026 ranging from 46 million to 67 million ounces. Yet demand faces headwinds of its own. India, one of the world’s largest silver buyers, recently raised import duties on the metal to 15% — comprising a 10% basic customs duty and a 5% agricultural infrastructure cess — and has introduced new import restrictions that could distort local pricing. Meanwhile, the photovoltaic industry, a key growth driver for silver, is expected to cut its consumption again in 2026 after a weaker 2025, potentially narrowing the anticipated deficit.

On the technical front, traders are watching a narrow band between $73.80 and $74.20. As long as silver holds above $74.20, targets at $76.12 and then $78.84 remain in play, based on an analysis from May 20. A break below $73.80, however, would signal further selling pressure.

The tug-of-war between a persistent structural deficit and softening demand from India and the solar sector, set against a macro environment where Fed policy remains uncertain, is likely to keep silver volatile in the weeks ahead. For now, the metal is straddling $76, riding a wave of geopolitical relief and lower yields — but clouds are gathering on the demand horizon.