The white metal is in the grip of its steepest monthly selloff in years, shedding more than a fifth of its value as a toxic mix of hotter-than-expected inflation and escalating Middle East tensions forces investors to flee. Spot silver slumped to $64.45 an ounce on Wednesday, a 1.5% drop on the day that extended the month-to-date carnage past 21%. The slide has been relentless: each fresh catalyst—from US consumer price data to Iranian missile strikes—has only deepened the rout.
At the heart of the selloff is May’s US consumer price index, which rose 4.2% from a year earlier, accelerating from 3.8% in April and hitting its highest level since April 2023. The energy component was the primary driver, climbing 3.9% month-on-month and 23.5% on an annual basis—alone accounting for more than 60% of the total monthly increase. Core inflation, stripping out food and energy, still ran at 2.9%, well above the Federal Reserve’s target. That leaves the central bank with little room to strike a dovish tone at its next meeting on June 16–17, and the CME FedWatch Tool now shows over a 70% probability of further rate hikes by the end of 2026. With the yield on the ten-year US Treasury note sitting comfortably above 4.5%, the opportunity cost of holding a non-yielding asset like silver has become painfully clear.
Geopolitical turmoil has added a fresh layer of pressure. US military strikes against Iranian air-defense systems last week were followed by Iranian rocket attacks on American bases, driving oil prices sharply higher. That energy shock feeds directly into the inflation figures, reinforcing the narrative that price pressures will stay stubbornly elevated. The combination of a firmer dollar and rising real rates has made dollar-denominated bullion even more expensive for foreign buyers, while speculative longs have been forced to liquidate.
Should investors sell immediately? Or is it worth buying Silber Preis?
The technical picture offers little reassurance. On the weekly chart, the 10-period simple moving average has sliced below the 20-period average, a classic death cross that traders view as a bearish signal. The relative strength index has dropped to 32, inching toward oversold territory, but that alone has not sparked a reversal. The next support zone lies between $61 and $60, and a break below that range could open the door to $54—a former double-top level. A sustained move under $50 would threaten the long-term uptrend entirely.
Yet beneath the surface of this macro-driven carnage, the physical market tells a different story. The Silver Institute forecasts a sixth consecutive annual deficit in 2026, this time of 46.3 million ounces. On the demand side, industrial processing is expected to edge down 2% to roughly 650 million ounces as the photovoltaic sector reduces silver content per panel despite rising solar installations. But demand from data centers, artificial-intelligence infrastructure, and automotive applications continues to grow. Coeur Mining, meanwhile, reaffirmed its 2026 guidance of between 18.7 million and 21.9 million ounces of silver production, underscoring that mine supply remains constrained.
For now, the market is caught in a tug-of-war. Short-term macro headwinds—inflation, rate fears, a strong dollar, and geopolitical uncertainty—have overwhelmed the underlying supply deficit. Whether the pendulum swings back depends on how the Federal Reserve interprets the energy-driven inflation spike: as temporary noise or as a reason to keep policy tight for longer. Next week’s FOMC decision will provide the first definitive signal, and the outcome will determine whether silver’s structural support can finally reassert itself or if the selloff has further to run.
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