Silver Price Forecast: Can Industrial Demand Offset Bearish Pressure Below $59?

Quick overview

Silver prices are still feeling the effects of a big drop back down from their all-time highs earlier this year, yet the metal’s fundamental picture keeps indicating a structurally undersupplied market. Spot silver is hovering at roughly $58.08 on July 10 after falling back from near $121 per ounce in January. Though the silver market has been impacted by increasing U.S. interest rates and a strong dollar, with strong long-term tailwinds provided by supply deficits and steady industrial usage.

Silver Market to Experience Sixth Consecutive Year of Supply Deficit in 2026

The global silver market is likely to see a sixth straight annual supply deficit in 2026. The Silver Institute in its World Silver Survey 2026 states it expects a supply deficit of 46.3 million ounces next year, up from a deficit of 40.3 million ounces in 2025. Since 2021, silver has seen a cumulative deficit of 762 million ounces of above ground inventory. There is limited upside for the growth of silver supply since almost 70% of global production comes as a co-product of copper, lead, and zinc mining, which cannot be immediately scaled up even with higher prices as is the case with primary silver mines. Although, there has been a growth in recycled silver in recent years which is helping to reduce the gap in silver production.

Silver is mostly driven by industrial consumption as it has accounted for over 50% of total demand. Solar photovoltaic, although silver usage has declined, remains the primary application of silver. Electric vehicles are projected to use around 25 to 50 grams of silver per vehicle, almost twice the amount used by traditional cars. Also, growing investments in artificial intelligence, semiconductor production, data centers, and 5G technologies have also contributed to demand for silver, as it has high conductivity.

Higher interest rates and strong dollar to continue putting pressure on price growth. Silver has continued to face pressure from higher rates and the stronger U.S. dollar with the Federal Reserve maintaining a cautious policy stance at its June FOMC meeting, signaling that inflation remains above target and supporting expectations for higher interest rates over a longer period. With the central bank indicating that inflation is not at their target level and higher rates will stay for a longer period, this has resulted in a strong U.S. dollar as higher yields on U.S. treasuries have increased.

The drop in demand in the precious metals sector is also due in part to easing geopolitical tensions following the reopening of shipping routes through the Strait of Hormuz. Lower commodity prices could boost industrial consumption. Analysts believe this could be seen as a correction in the longer term as demand for industrial metals could increase over time.

Silver Price Analysis: Breakdown of Triangle Pattern Keeps $57.51 in Focus

Silver continues to stay in the corrective phase after a bearish breakout from the descending triangle on the 2-hour chart. The metal continues to trade below the 200-period moving average of $65.89, the resistance level of the triangle pattern at $59.06.

The bulls could see a breakout above the $59.06 resistance, leading to the $61.55 and $64.27 levels. $57.51 is next level of support, with $55.61 and $53.11 if there is more selling pressure. The momentum for sellers remains positive, but there has been little downward pressure.

The Relative Strength Index (RSI) is at 35.98, staying above the oversold area, and the MACD histogram is under the neutral zero line but it shows signs of deceleration.

Silver faces a headwind of a higher interest rate environment and a strengthening U.S. dollar but remains an attractive investment as its long term fundamentals, a combination of strong supply deficits and increased demand from renewable energy and electric vehicles as well as the semiconductor industry and artificial intelligence applications, remain intact.

The next trigger to watch will be the US inflation reading, the Federal Reserve and industrial demand for signs whether silver will make it back above $59.06 or extend its correction to $57.51.

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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