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Silver is heading into its sixth consecutive year of supply shortfalls, yet the metal can’t seem to catch a bid. On Wednesday, XAG/USD traded around $75.20 an ounce in European hours, recovering modestly from a near-two-week low of $73.10 hit the previous day. But the bounce looks fragile as two powerful forces—a hawkish Federal Reserve and a sharply revised deficit forecast from UBS—combine to cap upside momentum.
The latest wrench came from the Fed minutes released on May 20, which laid bare the central bank’s reluctance to ease. The policy rate was left unchanged at 3.50%–3.75%, but a majority of participants signaled that further tightening would be appropriate if inflation remains stubbornly above the 2% target. Many officials also wanted to remove language the market had interpreted as a dovish signal. For a non-yielding asset like silver, higher interest rates are a direct headwind, making bonds more competitive. The 10-year US Treasury yield surged to 4.69%—the highest in over a year—while the 30-year yield climbed to 5.2%. At the same time, the US dollar index hit a six-week high of 99.47, further discouraging buyers outside the dollar bloc.
Adding to the macro pressure, UBS delivered a sobering reassessment of the supply-demand balance. The Swiss bank slashed its year-end 2026 price target from $85 to $80 per ounce and cut its second-quarter 2026 estimate even more aggressively, from $100 to $85. But the crucial detail was the deficit revision: UBS now expects the global silver market to post a deficit in the high double-digit millions—roughly 60 to 70 million ounces—down from its previous forecast of 300 million ounces. The bank cited weaker photovoltaic demand, falling purchases of jewelry and silverware, lower investor flows, and slightly higher mine production expected at around 850 million ounces in 2026. The narrative of acute scarcity, which had helped underpin prices, has been significantly dialed back.
That industrial demand engine has been sputtering for some time. According to the World Silver Survey 2026, physical demand from industry dropped 3% in 2025 to 657.4 million ounces, and further erosion to 639.6 million ounces is expected this year. The solar sector is the main drag, as manufacturers reduce silver content per unit or substitute the metal outright. While demand from AI infrastructure, automotive electronics, and power grids remains constructive, it is not enough to offset the decline in photovoltaics. Geopolitical tensions in the Middle East add a layer of complexity: higher energy prices could stoke inflation expectations and push the Fed’s rate path higher, indirectly punishing silver rather than providing a safe-haven bid.
Technically, the chart looks precarious. The relative strength index stands at 31—flirting with oversold territory—and the MACD is negative. After breaking out of its uptrend channel, silver could test support at $71 an ounce. On the upside, resistance is stacked at $76.33 and $78.25, levels that need to be reclaimed to signal a durable stabilization.
For now, the market’s attention is fixated on incoming inflation data, employment figures, and further Fed commentary. The $75 handle acts as a near-term pivot: holding above it keeps the recovery narrative alive, but with yields elevated and the silver deficit story softening, the burden of proof lies firmly on the bulls.
Silver slumped 5% on Tuesday to around $73.78 an ounce, pushing its monthly loss past 7% as investors squared off against a toxic mix of policy tightening and sliding industrial consumption. The selloff coincides with the release of the Federal Reserve’s meeting minutes this week, which market participants expect to reinforce a cautious stance after April’s third consecutive rate hold at 3.5%–3.75% – a decision that saw four FOMC members dissent for the first time since October 1992. Hawkish undertones from the central bank have driven the implied probability of a June rate cut below 3%, according to the CME Group, and Morgan Stanley now forecasts rates will stay unchanged through 2027 – a punishing backdrop for an asset that pays no yield.
The photovoltaic industry, once a reliable engine of silver demand, is scrambling to contain costs. The World Silver Survey 2026 from Metals Focus reports that PV silver consumption dropped 6% in 2025 to 186.6 million ounces and is expected to tumble another 19% this year to roughly 151 million ounces. The reason is stark: silver now accounts for as much as 29% of module costs, prompting Chinese producers to lead an aggressive substitution drive. Yet the technology transition is not entirely one-sided. Research from Ghent University shows that newer cell architectures such as TOPCon require 1.5 times more silver than conventional PERC designs, while heterojunction (SHJ) cells need twice as much – meaning substitution is racing against a counter-current of rising per-unit silver intensity.
On the supply side, the market remains structurally constrained. Roughly 70% of global silver output is a by-product of copper, lead and zinc mining, so higher prices do not automatically translate into higher production. As a result, the Silver Institute projects the sixth consecutive annual deficit at around 46 million ounces. UBS strategists have taken a more bearish view, slashing their 2026 demand forecast to just 300 million ounces, which would shrink the global deficit to between 60 and 70 million ounces but still leave the market in the red. Cumulative stock withdrawals since 2021 have reached nearly 762 million ounces, and COMEX inventories have plunged from 531 million ounces last October to about 315 million ounces. Despite this physical tightening, near-term price action is being dominated by rates and demand concerns.
New consumption vectors are beginning to emerge, offering a longer-term anchor for the white metal. The growing build-out of data centres for artificial intelligence, the expansion of 5G networks, and the ramp-up of electric-vehicle production all require silver’s unique electrical conductivity. These sources of demand are still in their infancy relative to the solar sector, but they could eventually help offset the photovoltaic slowdown.
Analyst forecasts underscore the uncertainty. The LBMA survey sees silver averaging $79.57 an ounce this year, albeit with a wildly wide trading range of $42 to $165 – a reflection of just how much is hanging in the balance. The Reuters consensus sits just shy of $80, while Citigroup has out a bullish $110 target for 2026. For now, the metal is caught between a hawkish central bank and a shifting industrial landscape, with the next major catalyst likely to come from Thursday’s US purchasing managers’ index releases.
Silver’s latest bounce to $76.75 an ounce on Monday — a 1.33 percent gain — offered a fleeting respite from what has been a brutal stretch. The metal had just suffered a 12 percent weekly plunge, and the brief recovery was built on fragile hopes for a diplomatic breakthrough in the Iran standoff. Those hopes quickly evaporated as both Washington and Tehran hardened their demands: Trump reportedly rejected Iran’s latest overture, and Iran pushed back against calls to dismantle enrichment facilities, leaving nuclear talks deadlocked.
But the real story for silver is no longer just a geopolitical tug-of-war. The market is recalibrating around a deeper shift in its demand profile. The solar industry, long a pillar of silver’s bullish narrative, is quietly but decisively reducing its appetite for the metal. Module makers, squeezed by high silver prices, are throttling back consumption per cell through thrifting and alternative metallisation techniques. Chinese manufacturers are leading the charge: Longi Green Energy Technology plans to commercialise copper-based back-contact cells in the second quarter of 2026, while Jinko Solar is scaling up copper-based panel production and Shanghai Aiko Solar has already launched silver-free solar cells.
The numbers underscore the trend. Global photovoltaic demand for silver fell 6 percent in 2025 to 186.6 million ounces, and Metals Focus projects a further decline to around 151 million ounces in 2026 — a drop of roughly 19 percent year-on-year. That is not a normal inventory correction. It is a structural substitution, and it removes one of the most powerful growth stories that had underpinned silver’s long-term case.
Short-term, the demand vacuum is not being filled elsewhere. Even though electric vehicles, AI data centres and 5G infrastructure all require silver for its unmatched conductivity, the volume from these sectors is not yet large enough to offset the solar slump. The Silver Institute expects total industrial silver demand to contract for a second consecutive year in 2026, with the electrical and electronics category shrinking by 6 percent.
The macro environment is adding its own headwinds. Hotter-than-expected U.S. producer, import and export price data for April has reignited inflation fears, and markets have now fully priced out any Federal Reserve rate cut for 2026. Some traders are even betting on a hike by December. A stronger dollar and rising bond yields are a toxic combination for a non-yielding asset like silver. The Strait of Hormuz remains a wild card — roughly 20 percent of global oil flows through the waterway, and the International Energy Agency calls the disruption the largest in oil market history — but Citi analysts expect a resolution by the end of May. Until then, volatility stays elevated.
The supply side offers a counterweight, but only a limited one. The World Silver Survey 2026 projects a sixth consecutive annual deficit of roughly 46 million ounces, with cumulative stock withdrawals since 2021 nearing 762 million ounces. Yet supply is structurally unresponsive: around 70 percent of silver is produced as a byproduct of copper, lead and zinc mining, so mines cannot simply ramp up output when prices rise.
That supply crunch is what keeps a floor under a battered price. The gold-to-silver ratio has widened to around 59, having compressed briefly to 55 after the U.S.-China tariff truce, and the move came entirely from silver, not gold — a sign that the metal is being traded as an industrial commodity rather than a safe haven. Analyst forecasts are all comfortably above current levels: J.P. Morgan sees an average of $81 an ounce for 2026, the Reuters consensus of 30 analysts sits at $79.50, and ING at $78. The LBMA survey projects an average of $79.57, albeit with an extraordinarily wide range of $42 to $165.
The next catalyst for silver will not come from traditional precious-metal narratives. For now, the metal is caught between the supply deficit as a safety net and the twin pressures of solar substitution and a hawkish Fed. The Silver Institute notes an annualised 30-day volatility of nearly 60 percent, and that turbulence looks set to persist as long as the Iran conflict remains unresolved and the central bank refuses to signal a pivot.
Gold finds itself squeezed between two powerful forces: an aggressive Indian import tariff hike that threatens to reroute physical demand through the black market, and stubbornly high US inflation that is recalibrating Federal Reserve expectations. The combination has left bullion nursing a monthly loss of roughly 3.5%, with spot prices hovering just above key technical levels.
India stunned markets by lifting effective import duties on gold and silver from 6% to 15%, effective May 13. The move follows Prime Minister Narendra Modi’s public appeal for citizens to forgo gold purchases for a year, underscoring New Delhi’s urgency to protect foreign exchange reserves. India’s gold imports had surged 24% in the fiscal year just ended, hitting a record $71.98 billion and weighing heavily on the trade balance.
But the tariff shock is already reshaping behaviour in unexpected ways. Indian investors, rather than retreating entirely, have pivoted toward gold exchange-traded funds. Domestic ETF inflows jumped 186% in the first quarter to 20 tonnes — an all-time high, according to the World Gold Council. This suggests that while official imports may slump, the appetite for gold exposure is being channelled through financial instruments rather than physical bars.
Across the Pacific, the US inflation picture continues to darken. April’s producer price index surged 1.4% month-on-month, the steepest monthly rise since March 2022, pushing the annual rate to 6.0%. The consumer price index followed suit, climbing to 3.8% — its highest since last May. The data has upended the rate-cut narrative. Traders now price a roughly 39–40% probability of a Fed rate hike before year-end, effectively extinguishing hopes for monetary easing in 2026.
Higher real rates are anathema for a non-yielding asset like gold. The pressure is evident in the world’s largest bullion ETF, the SPDR Gold Shares. Despite a trickle of inflows in recent days, the fund has haemorrhaged approximately $4.5 billion on a year-to-date basis, with holdings shrinking by 32 tonnes. Institutional money continues to head for the exits.
Adding to the inflationary cocktail is the geopolitical factor. The blockade of the Strait of Hormuz since late February has driven Brent crude above $100 a barrel, feeding directly into the producer price data. So long as the waterway remains contested, energy costs will keep the Fed’s hawkish bias intact.
Gold itself is trading around $4,690–$4,707 an ounce, depending on the pricing venue, and sits fractionally below its 50-day moving average. The intraday trend lacks conviction — the metal is oscillating without a decisive breakout signal. Year-to-date, however, the underlying resilience is still on display: gold remains up roughly 8.4%, supported by strong physical demand.
The World Gold Council reported that total gold demand, including over-the-counter investment, reached a record 1,230.9 tonnes in the first quarter of 2026, up 2% from the prior year. That structural underpinning, driven by central bank buying and broader jewellery appetite, is the key counterweight to the macro headwinds.
Yet the Indian tariff shift carries a darker side effect. Industry players warn that the steep levy will revive smuggling, which had subsided after previous duty cuts. If a meaningful portion of official imports migrates to the grey market, the government’s fiscal and reserve goals may be partially undermined.
For now, the immediate catalyst for gold’s next directional move remains US inflation data and the evolving Fed narrative. Policymakers are in a bind: easing oil-driven supply pressure is beyond their control, and a rate hike — once unthinkable — is now being actively discussed. That dynamic, combined with India’s attempt to cap its own demand, leaves gold in a precarious position, despite the record physical backdrop.
XRP has been stuck in a sideways grind near $1.43, but the calm price action masks a flurry of activity that is reshaping the asset’s fundamentals. The number of wallets holding at least 10,000 XRP hit an all-time high of 332,230 on May 12, according to Santiment — a milestone that signals sustained accumulation by deep-pocketed holders rather than a fleeting speculative spike. This build-up has been underway since mid-2024, persisting even through the token’s 23.8% year-to-date decline.
Institutional demand is adding another layer of momentum. Spot XRP ETFs listed in the U.S. recorded net inflows of $25.8 million on May 11, the strongest single-day showing since January. Franklin Templeton’s XRPZ product led the pack with $13.6 million, followed by Bitwise at $7.6 million and Grayscale at $4.6 million. Cumulative net inflows into these regulated vehicles have now surpassed $1.35 billion, steadily expanding the investor base beyond crypto-native traders into mainstream fund flows.
The derivatives market is also heating up. Open interest in XRP futures climbed about 23% in May to roughly $2.9 billion, reflecting rising speculative appetite and deeper liquidity — though not necessarily a guarantee of near-term price gains.
Ripple is reinforcing its professional-grade offering. A $200 million credit facility from Neuberger Specialty Finance is earmarked for Ripple Prime, the prime brokerage platform born from the acquisition of Hidden Road in 2025. The facility is designed to expand margin financing across asset classes including equities, fixed income, forex and digital assets — a move that gives institutional clients the credit capacity and settlement certainty they demand.
Ripple Prime’s revenue has already tripled year-over-year, and the firm is embedding itself deeper into traditional market plumbing. On May 13, Crossover Markets launched CROSSx Disclosed, a platform that lets institutional participants tap more than 30 OTC liquidity providers. Ripple Prime serves as the prime broker for netting and settlement, with the matching engine capable of processing up to one million orders per second. The goal is capital efficiency: clients can customise liquidity pools and streamline post-trade processes.
The push extends to Latin America, where Ripple is building automated market maker infrastructure for banks in Brazil alongside UDAX, Levery and FGV, with a VASP licence application underway to secure regulatory footing in the region.
The XRP Ledger is seeing a surge in real-world usage. Transaction volumes jumped 65% over the past twelve months to 71 million. A notable milestone came from a pilot that saw JPMorgan, Mastercard and Ondo Finance execute a cross-border tokenised redemption of U.S. Treasury bonds in under five seconds — a demonstration of the ledger’s utility for institutional-grade settlements.
The RLUSD stablecoin, built on the same ecosystem, has grown its market capitalisation to roughly $1.6 billion, placing it among the 60 largest cryptocurrencies. Higher stablecoin liquidity within the XRP network bolsters the usable float for trading and payments.
All these developments converge on a single political event this Thursday: the Senate Banking Committee’s markup of the CLARITY Act. The bill aims to clarify jurisdictional lines between the SEC and CFTC for digital assets, and a specific definition of “network tokens” could classify XRP as a commodity for secondary-market sales — a legal distinction that would sharply reduce regulatory overhang.
More than 100 amendments have been filed, making the outcome uncertain, but prediction markets currently assign a 60% to 79% probability of passage in 2026. Even so, this week’s hearing is the most concrete legislative test yet for XRP’s institutional narrative.
Technically, XRP is trading inside a symmetrical triangle pattern. A sustained break above the $1.48–$1.50 resistance zone could open upside targets toward $1.60–$1.80, while key support sits at $1.40–$1.42. The upcoming Senate action will determine whether the accumulation beneath the surface finally translates into a breakout or keeps XRP pinned in its current range.