Key Points
- Silver futures fell to $59 before the release of inflation data
- Treasury yields and Fed uncertainty weigh on precious metals
- The silver market is facing a supply deficit for the sixth consecutive year.
Silver prices fell to $59 per ounce on Tuesday (October 13), continuing the weak trend since October. Investors are awaiting U.S. inflation data, which could change the market's expectations regarding the Federal Reserve's interest rate path.
In October COMEX, silver futures fell by 1.63% to around $59.16 per troy ounce, with a cumulative decline of 2.49% over two trading days. Since the beginning of 2026, the metal has seen a cumulative decline of about 15.7%, reflecting the ongoing impact of monetary policy pressures and changes in investment demand.
Gold has also weakened, highlighting the challenges faced by precious metals: higher yields on government bonds are competing with interest-free assets.
Why has the price of silver fallen today?
The latest round of silver price declines occurred on Wednesday, ahead of the release of the U.S. Consumer Price Index ( CPI ) report, with investors looking for signs to determine whether inflation remains high.
If inflation is stronger than expected, it may reinforce market expectations that the Federal Reserve will maintain a tight monetary policy and even raise interest rates again. Higher yields typically increase the opportunity cost of holding silver, making interest-bearing government securities more attractive.
The US dollar has also remained relatively strong, which has put additional pressure on commodities denominated in dollars.
These factors had previously pushed the silver price below $66 in September, at which time traders were already questioning whether precious metals could maintain their previous rebound.
While silver is weak, gold has also shown significant fluctuations. The recent decline in the gold market reflects the market's concerns regarding inflation, oil prices, and the Federal Reserve's next policy decisions.
Silver supply gap or restrictions may lead to a long-term downward trend
Despite the price correction, the supply and demand fundamentals for silver remain relatively tight.
According to data from the Silver Association ( Silver Institute ), the global silver market is expected to experience an annual supply deficit for the sixth consecutive year in 2026.
The total supply is expected to increase by 1.5%, to approximately 1.05 billion ounces, mainly driven by increased mine production. However, industrial silver demand is expected to decline by 2%, to about 650 million ounces.
Solar manufacturers are reducing the amount of silver used in each photovoltaic cell, while demand related to power infrastructure, automobiles, and artificial intelligence provides some counterbalancing support.
However, the anticipated supply gap does not necessarily mean that prices will rise, especially when investment demand and the macroeconomic environment deteriorate.
After CPI, can $59 hold its ground?
The short-term trend of silver prices may depend on how Wednesday's inflation data affects U.S. Treasury yields and the dollar.
If inflation readings are weak, it could ease market expectations for the Federal Reserve to further tighten policy, thereby improving the trading environment for silver and gold.
On the contrary, if inflation is unexpectedly strong, it could further exacerbate the pressures already faced by precious metals.
A broader rise in Treasury bond yields also poses additional challenges, as higher government borrowing costs make non-yielding assets seem less attractive.
