Silver Price Forecast: Industrial Green Engine Holds $61.05 Floor as 46M Oz Deficit Counters Hawkish Fed and Swiss Peace Deflation

Quick overview

In the precious metals complex, structural issues are about to hit a climax, where industrial green-energy demand comes up against a hard wall of macro liquidation. On Wednesday, June 24, 2026, spot silver (XAG/USD) was trading inside a tight consolidation band during European hours at $61.05, down a slight 0.17% on the day.

Bullion desks and sovereign physical accumulation desks are executing localized block buy orders into major horizontal pivot points, trying to hold the line in the face of a major wave of rebalancing from macro hedge funds.

A Supply-Demand Deficit Versus De-escalation

Silver’s fundamental supply-demand structure remains remarkably tight, a distinct difference from other, more speculative precious metals in its medium-term outlook. In its latest update to the World Silver Survey, published jointly by the Silver Institute and Metals Focus, the analysts predict that silver will see its 6th straight yearly production deficit at 46.3 million oz. in 2026. Since over 70% of silver is produced only as a secondary byproduct from the mining of base metals such as lead, zinc and copper, mining companies in the silver business are not able to boost output significantly.

In fact, they can’t keep up with the burgeoning green economy, which is sucking up physical metal from the COMEX and London bullion vaults to serve AI data center power grid and storage infrastructure needs, 5G infrastructure networks, and other heavy-duty electronic component supply chains.

While this industrial demand is holding strong, it has also absorbed any gains from the safe-haven bid in precious metals. The U.S. and Iran finalized an interim deal over the weekend in Switzerland known as the “Islamabad Memorandum of Understanding.” That deal has reopened shipping traffic through the critical Strait of Hormuz.

Consequently, spot oil futures have slipped back below $74 per barrel, removing the inflation risks tied to geopolitical tensions in the West. Those fears have also removed the immediate demand for safe-haven flows into precious metals.

The Warsh Doctrine Strengthens the Dollar Floor

Adding to the headwinds for the yellow metals is the aggressively hawkish Fed policy announced at the June 16-17 FOMC meeting, the historic meeting that included Federal Reserve Chair Kevin Warsh. After highlighting recent inflation at 4.1% core CPI and 3.8% on headline inflation, Warsh ruled out near-term rate cuts and signaled that the central bank will adopt a data-dependent, hard-line policy that is more aligned with the principles of strict monetarism.

Higher rates for longer will also result in higher U.S. real rates and lift the U.S. Dollar Index (DXY) to new highs for the cycle. That macro pressure increases the opportunity costs to owning non-yielding assets like precious metals as investors unload their commodity holdings on the futures market until the economy gives more hints about its direction.

Technical Analysis: XAG/USD Battles for Stability at Core 2H Pivot Shelf

As we look at the 2H technical chart, silver has corrected lower and has priced the market into a heavily compressed, oversold value zone.

• The Pivotal Support Grid: The XAG/USD market is showing clear signs of exhaustion just above the major historical pivot support at $60.57. A key structural support level on the higher multi-month timeframe, that sits a long way below the 2H EMA200 ($68.44) the market in this area is showing small candles that indicates the risk is transferring from weak momentum sellers to long-term institutional buyers.
• Momentum is Oversold: The 14 period RSI is trading at an extreme oversold value of 23, which signals the local markets may have hit their exhaustion point and should set the stage for a violent short covering bounce.
• The Trade Execution Blueprint: We could trade two different technical plays based on the two operational levels.

Bullish Mean-Reversion Trade: Consider going tactically long on any confirmed 2H candle reversal or strong accumulation signature inside the $60.57 to $61.00 value zone. Place a risk below $59.67 and look for an immediate snap back to the first 2H resistance zone at $63.33, extending to the first 2H value zone at $64.35.

Bearish Continuation Trade: Trend following shorts should not be looking at shorting from this oversold level, rather looking for a corrective rally back to the broken 2H supply zone at $63.33 to $64.35. Placing a stop just above $65.00 and targeting a second leg through the 2H support zone at $58.85.

Silver is unwinding speculative exposure, and while Kevin Warsh’s firm domestic policy baseline keeps near-term financing costs high, the inescapable reality of a 46-million-ounce structural deficit and a deeply oversold technical reading at $60.57 implies that XAG/USD is well-coiled for an intermediate relief bounce as the late-June cycle matures.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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