Silver closed last week at $75.67, nursing a 7.55% weekly loss that erased any lingering optimism from the metal’s January highs. The Friday session brought a modest 1.21% bounce to $76.41, but that did little to mask the scale of the retreat — silver now sits nearly 35% below its 52-week peak of $116.89 hit in late January. On a year-to-date basis, the metal still holds a gain of roughly 5.7%, a number that underscores just how violent the correction from the January summit has been.
The gold-to-silver ratio has stabilized around 60:1 to 61:1, well below the historical average of roughly 70:1. That means silver has substantially outperformed gold over the past twelve months, even if the current price action tells a different story.
A Six-Year Supply Gap With No Relief in Sight
The physical market tells a far more bullish tale than the price chart. The Silver Institute’s “World Silver Survey 2026,” released in mid-April, projects a supply deficit of 46.3 million ounces for 2026 — the sixth consecutive year that demand has outstripped production. What makes this particularly alarming is the cumulative drawdown in inventories: since 2021, roughly 762 million ounces have been pulled from global reserves, primarily from COMEX and LBMA vaults. That figure is equivalent to nearly an entire year’s worth of global mine output. With mine production forecast to stagnate or edge lower in 2026, the market has lost its buffer for demand spikes.
The FOMC Looms Large
The immediate catalyst for this week is the Federal Open Market Committee meeting on April 28-29. Markets are pricing in near-certainty that rates will stay at 3.50% to 3.75% — Polymarket puts the probability at 99.7%, and J.P. Morgan Global Research expects rates to remain unchanged not just this month but for the rest of 2026. That means no tailwind from falling real interest rates for silver, leaving the metal at a disadvantage against yield-bearing assets.
The Fed’s language on inflation expectations will be the key variable. The U.S. Consumer Price Index hit 3.3% in March, the highest since May 2024, and rising bond yields have increased the opportunity cost of holding non-yielding precious metals. A strong dollar has further compressed international buying power for silver — any easing on the currency front could quickly stabilize prices.
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Macro Data and a Leadership Transition
Thursday brings a heavy data slate: first-quarter GDP, the core PCE price index, and initial jobless claims. Friday follows with the April employment report. Strong numbers would further dampen any lingering hopes for rate cuts, keeping the pressure on silver.
Adding to the uncertainty is the structural risk of a Fed leadership change. Jerome Powell’s term as chair ends on May 15, 2026. A dovish successor could provide a powerful boost to precious metals, while a hawkish appointment would extend the headwind from high real rates.
Geopolitical Wildcard
The ongoing closure of the Strait of Hormuz is driving oil prices and inflation higher, compounding the pressure on silver. Higher inflation directly hurts non-yielding assets, and the geopolitical dimension adds a layer of unpredictability that traditional macro models struggle to capture.
Technical Levels and Institutional Outlook
On the downside, $72.61 is the first support level to watch, followed by the psychologically important $70 zone. A clean break below $75 would shift focus to that lower support and raise the question of when structural scarcity will override short-term macro concerns. On the upside, resistance sits at $83.75, with a move toward $80 becoming plausible if the $75 floor holds.
Despite the current correction, institutional forecasts remain constructive. J.P. Morgan sees the 2026 average at $81, while Commerzbank projects $90 by year-end and $95 by the end of 2027. Whether those targets prove achievable depends heavily on how the Hormuz crisis, the Fed’s policy path, and Powell’s succession play out in the coming weeks.
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