Spot silver closed last week at $75.67 per ounce, shedding roughly 7.5% in a session that saw the metal slip below its 50-day moving average. The selloff defies conventional wisdom: geopolitical tensions in the Middle East, which typically ignite safe-haven demand, have instead fueled inflation fears that are keeping the Federal Reserve on a hawkish footing.
A Diplomatic Deadlock That Backfired
The so-called Islamabad Talks — the first direct US-Iranian negotiations since 1979 — collapsed on April 12 without an agreement over control of the Strait of Hormuz. Tehran rejected a second round on April 19, citing “exaggerated demands” from Washington, and President Trump signaled on April 25 that he would not authorize further fruitless rounds. The ongoing blockade of the waterway keeps energy prices elevated and stokes inflation anxiety, but silver has failed to benefit. The metal’s crisis premium has been overwhelmed by the market’s focus on monetary policy.
The Fed Takes Center Stage
All eyes are on the Federal Reserve’s late-April meeting. No rate change is expected, but the accompanying statement will be parsed for any shift in tone. A strong dollar is already weighing on silver by making it more expensive for non-dollar buyers, and the classic flight-to-safety effect has been muted.
Compounding the pressure is the leadership transition at the Fed. The Justice Department has dropped its investigation into outgoing Chair Jerome Powell, clearing a major hurdle for his nominated successor, Kevin Warsh, who has advocated for a more aggressive inflation fight. The Senate could vote on Warsh’s confirmation swiftly before Powell’s term ends in mid-May. Markets are now pricing in less than a full 25-basis-point cut by December, a stark reversal from earlier expectations of multiple reductions this year.
Solar’s Slowdown Reshapes Demand
Beyond monetary policy, a structural shift is underway on the demand side. The solar industry, long a key driver of industrial silver consumption, is pulling back. Silver demand from photovoltaic producers dropped notably last year, and experts project a further decline to around 151 million ounces in 2026.
Should investors sell immediately? Or is it worth buying Silber Preis?
Chinese manufacturers are leading the charge toward cheaper alternatives. Industry giants like Longi Green Energy and Jinko Solar are planning large-scale adoption of copper-based cells, while Shanghai Aiko Solar is already producing completely silver-free modules. The substitution is technically challenging — copper drives up assembly costs and isn’t compatible with all high-temperature processes — but the overall trend is clear: solar’s appetite for silver is shrinking.
The Supply Squeeze That Won’t Quit
Despite the demand headwinds, a sustained price collapse is far from guaranteed. The silver market has now posted five consecutive annual deficits, with last year’s shortfall exceeding 40 million ounces. For 2026, analysts forecast a sixth straight deficit of roughly 46 million ounces.
The supply side is structurally constrained. About 70% of global silver output is a byproduct of gold, copper, or zinc mining, meaning producers can’t easily ramp up production in response to price signals. Declining ore grades and a lack of new mine projects further cap supply growth.
What Comes Next
The near-term direction hinges on the Fed’s statement Wednesday. A signal that the central bank is open to rate cuts later this year, despite geopolitical turmoil, would remove a major headwind for silver. A quick Senate vote on Kevin Warsh could provide additional clarity on the future policy path.
Technically, the $76 level is the first hurdle for any recovery. The 52-week high of $116.89, reached in late January, now sits more than 35% above current prices — a reminder of how far the metal has fallen. For now, the market is caught between a supply deficit that should be bullish and a monetary environment that is anything but.
Ad
Silber Preis Stock: Buy or Sell?! New Silber Preis Analysis from April 26 delivers the answer:
The latest Silber Preis figures speak for themselves: Urgent action needed for Silber Preis investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from April 26.
Silber Preis: Buy or sell? Read more here...