Silver dropped to $65.06 an ounce on September 23 after two Fed officials signaled more tightening ahead, and fell further toward $64 the next morning. Solar demand for the metal is shrinking as manufacturers cut the silver in each panel, but forecasters still expect a sixth straight year of market deficit.
Silver fell about 3% to close at $65.06 an ounce on September 23, against gold at $4,304.11, a gold-silver ratio of 66.2. Early trading on September 24 pushed silver lower still, near $64. The metal is about 9% below where it started 2026 and roughly 46% below its January peak of $121.58.
Fed comments trigger the selloff
The drop followed two regional Fed presidents saying the case for further tightening remained after last week's quarter-point rise. The Federal Reserve raised its policy rate on September 16 to a range of 3.75% to 4.00% and projected one more rate hike this year, which the market now prices in before year-end.
Solar installs surge, but silver content shrinks
The United States installed 11.4 gigawatts of solar in the second quarter, up 45% on a year earlier, according to the Q3 2026 US Solar Market Insight from SEIA and Wood Mackenzie, as developers rush projects ahead of expiring federal tax credits. Utility-scale installations made up 9.6 gigawatts of that and grew 61%, while residential installs fell 12% and community solar fell 14%.
China's installed solar capacity reached 1,286 gigawatts at the end of July, passing coal-fired capacity for the first time, even as its January-to-July additions ran 61.4% below the same period of 2025. Panel volume is holding, but each cell now carries less silver than before. Metals Focus and the Silver Institute forecast photovoltaic silver demand at about 151.0 million ounces for 2026, down from 186.6 million ounces in 2025.
Deficit narrows but does not close
J.P. Morgan's Gregory Shearer said on August 13 that solar silver demand could fall by around 30% this year, a reduction of roughly 60 million ounces — the lowest estimate among forecasters, and one the Silver Institute has not adopted. Even on that estimate, the market's 2026 shortfall roughly halves rather than disappears, extending the deficit into a sixth consecutive year on Metals Focus and Silver Institute figures. Silver already sealed into panels stays there for decades, so none of the metal installed this year returns to the market within any holder's investment horizon.
Source: Commodities Analysis & Opinion
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