Silver's Sixth Consecutive Supply Deficit Persists Despite a Death Cross

• Silver traded at $58.31/oz, up 1.2% on the day but still 52% below its January 2026 record high of $121.62 despite a projected sixth straight annual supply deficit. 
• The Silver Institute and Metals Focus project a 46.3 million ounce silver deficit in 2026, up 15% from 2025, marking a sixth consecutive annual deficit despite weaker price momentum.
• Silver has support at $56 and resistance at $62, but a projected sixth straight annual supply deficit could strengthen a confirmed break above $62 toward $74.80.
• A death cross formed in late July as the 50-day moving average fell below the 200-day moving average, but the projected 46.3 million ounce supply deficit suggests short-term technical weakness has not changed the longer-term supply outlook.
• Money markets price a 68% probability of a 25 basis point Fed hike in September. A stronger-than-expected US jobs report could pressure silver toward $56, but a projected sixth straight annual supply deficit continues to support the longer-term outlook.

Silver Rebounds Toward $59 as Lower Oil Prices Reduce Rate-Hike Expectations

Silver rose 1.2% to $58.31/oz after President Trump said peace talks with Iran would resume, reducing fears of a Strait of Hormuz disruption and sending crude oil prices lower. Even after the rebound, silver remains 52% below its January 2026 record high of $121.62. 

Lower crude prices reduced inflation expectations, lowering Fed rate-hike expectations, the US Dollar Index, and real Treasury yields. A weaker US dollar supports silver prices, while the projected 46.3 million ounce supply deficit shows physical demand continues to exceed available supply despite weaker market sentiment.

Silver's Supply Deficit Deepens as Coin & Bar Demand Rises 

Silver's long-term outlook is driven by a physical supply deficit rather than short-term market sentiment. The Silver Institute and Metals Focus project a 46.3 million ounce silver deficit in 2026, up 15% from 2025, marking a sixth consecutive year that demand exceeds mine and recycled supply. 

Silver Institute data show 762.1 million ounces have been drawn from above-ground bullion stocks since 2021 to cover the supply deficit. Although industrial fabrication is forecast to fall 2% to about 650 million ounces as higher prices reduce solar and jewelry demand, mine output increases only 1% to 820 million ounces. Physical coin and bar demand is forecast to rise 20% to a three-year high of 227 million ounces, reinforcing physical demand even as industrial consumption slows.

Death Cross Meets a Sixth Consecutive Silver Deficit

Silver's 50-day moving average crossed below its 200-day moving average in late July, a bearish technical signal that has kept prices between $56 and $62 since mid-June. The projected 46.3 million ounce supply deficit suggests the technical weakness has not changed the longer-term physical market. 

In the base case, a stable US Dollar Index and jobs data near expectations keep silver trading between $56 and $62 through the third quarter. In the bear case, a stronger-than-expected US jobs report raises Fed rate-hike expectations and could push silver back to $56 support. In the bull case, a confirmed close above $62 could lift silver toward $74.80, reinforcing the physical deficit as the dominant longer-term driver.

Coin & Bar Demand Rises 20% Despite Silver's Price Weakness

Silver fell 5.92% over the past month but remained 55.97% higher over the past year, highlighting short-term volatility despite a projected sixth consecutive annual supply deficit. FXEmpire distinguishes between the short-term death cross signal and the longer-term physical supply outlook. 

FXEmpire said longer-term buying interest remains limited despite the favorable supply picture. Whether technical signals or the physical deficit lead prices this quarter will depend on the September US jobs report and Fed rate expectations. A confirmed move below $56 or above $62 will provide the next test of whether short-term sentiment or tightening physical supply has the greater influence on silver prices. 

Watch $62 Resistance & US Jobs Data for Silver's Next Breakout Signal

Silver is likely to remain between $56 and $62 while the US Dollar Index stays capped and real Treasury yields ease on lower Fed rate-hike expectations. The metal has traded within that range since mid-June even as the Silver Institute projects a sixth consecutive annual supply deficit.

A confirmed close above $62 could lift silver toward $74.80, suggesting tightening physical supply is beginning to outweigh the recent bearish technical signal. This Friday's US jobs report is the next key catalyst. A jobs report that keeps Fed rate-hike expectations near current levels supports the existing range, while a stronger-than-expected result could push silver back toward $56.