Silver's spot price has fallen 17% in a month to about $54 per troy ounce. A September Fed rate hike and rising inflation drove the drop, while analysts at JPMorgan and UBS expect a partial recovery by year-end.
Silver's spot price has declined 17% over the past month to about $54 per troy ounce. The Motley Fool's Leo Sun links the pullback to two headwinds this year.
Silver slides from a January record
Silver's spot price reached a record high of $121.67 per troy ounce on Jan. 29, 2026, a 429% gain over the previous two years. Growth in cloud infrastructure and AI markets, which boosted data center demand, caused demand for silver to outstrip supply, and expectations for rate cuts pushed more investors toward precious metals.
This year, however, the picture turned. Rising inflation forced many industrial manufacturers to rein in spending, especially solar panel makers, who pivoted toward processes using less silver or cheaper metals like copper.
The Fed's September hike weighs on metals
The Federal Reserve held its benchmark rates steady through most of the year but raised them in September for the first time in three years. The rate hike strengthened the U.S. dollar and weakened silver, gold and other dollar-priced assets.
Rising Treasury yields added pressure. With the 10-Year Treasury yielding nearly 5%, fixed-income investments look more appealing than precious metals as safe-haven plays.
Analysts see a partial rebound
Long-term supply support remains. The Silver Institute and Metals Focus say the supply deficit could widen from 40.3 million ounces in 2025 to 46.3 million ounces in 2026, the sixth consecutive year of shortfall.
Most analysts do not expect silver to revisit its all-time high this year, but they expect a bounce. JPMorgan sees silver at $63 per ounce by year-end, while UBS expects $70. Silver could recover if the Fed holds rates unchanged, but ongoing geopolitical conflicts in Iran and Ukraine and trade tensions could keep inflation hot and force further hikes.
Source: The Motley Fool
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