Silver price hits new low, here is what comes next

Silver was trading above $92 per ounce in late February, days before the US and Israel launched strikes on Iran on February 28. The metal had hit an all-time high of $121.785 per troy ounce on January 29.

On June 9 it fell 3% to a two-month low of around $63.37. The metal has now lost more than 40% of its value since the Iran war began, and the dynamic driving that decline is not what most precious metals investors would have predicted.

Silver is falling not because geopolitical risk has disappeared, but because of what the Iran conflict is doing to inflation expectations, and through them, to interest rate expectations. That is a more complicated and more durable problem than a simple flight from risk assets.

Why the Iran war is hurting silver rather than helping it

The conventional playbook says that conflict in the Middle East is good for precious metals.

Investors rotate into safe havens, gold and silver prices rise, and the trade holds until the situation resolves.

That playbook is not working in 2026 because the Iran conflict has a second-order effect that is more powerful than the safe-haven bid: energy prices.

Restricted traffic through the Strait of Hormuz has kept oil prices elevated for months. Higher oil prices feed directly into consumer price inflation.

US CPI rose 4.2% year-over-year in May, its highest reading since April 2023, according to FXStreet.

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That inflation print has shifted the entire conversation about Federal Reserve policy.

Before the Iran war began in late February, markets were pricing in multiple rate cuts in 2026.

Those expectations have been almost entirely reversed.

Fed Governor Lisa Cook said in early June she is prepared to hike rates if needed, and the CME FedWatch tool is now showing a growing probability of a rate increase before year-end, according to CNBC.

Goldman Sachs removed its 2026 rate cut calls entirely in June and is now forecasting the first cut in June 2027 at the earliest.

For silver, this is a direct headwind. The metal generates no income. When Treasury yields rise and the rate-hike probability increases, the opportunity cost of holding silver goes up.

Capital moves toward yield-bearing assets, the dollar strengthens, and dollar-denominated commodities become more expensive for foreign buyers. All three forces are operating simultaneously right now.

What makes silver's situation more complicated than gold's

Gold fell to two-month lows alongside silver in early June, but silver's decline has been steeper.

The reason is structural.

Silver occupies two roles in the global economy that pull in opposite directions during this specific environment.

As a monetary metal, silver behaves like gold: it suffers when rates rise and the dollar strengthens.

But silver is also a major industrial metal, used in solar panels, semiconductors, electric vehicles, medical equipment, and increasingly in the electrical infrastructure supporting AI data centers.

That industrial demand is not disappearing, but it is being overwhelmed in the short term by the rate-driven selloff in the monetary side of the trade.

The result is that silver is being sold by investors who are reducing precious metals exposure because of the rate environment, while the industrial buyers who would normally provide a floor are not yet stepping in aggressively enough to offset that selling pressure.

"The US dollar is going to remain bid, and that means gold is likely to remain under pressure," Matt Simpson, senior analyst at StoneX, told CNBC.

Silver, with its dual exposure, faces even more concentrated pressure than gold when the dollar strengthens.

The supply and demand picture underneath the macro noise

The macroeconomic narrative is dominating silver's price action right now, but the fundamental picture beneath it has not changed.

Silver supply is structurally constrained because most of the world's silver is produced as a byproduct of mining for copper, lead, and zinc.

Production cannot simply be dialed up in response to price signals the way it can for metals where silver is the primary target.

That supply dynamic contributed to the structural deficits that helped push silver to its January highs, and those supply characteristics have not changed.

On the demand side, the most recent data available showed that silver demand from solar panel manufacturing, AI infrastructure buildout, and electrification programs was running at elevated levels heading into the current pullback.

Those applications are growing, not shrinking.

The World Silver Survey had cited structural deficits for consecutive years heading into 2026, and nothing about the Iran war changes the underlying need for silver in the green energy transition or in advanced electronics manufacturing.

Silver has fallen more than 40% from its January highs, a decline that ranks among the sharpest in decades. The most recent price, around $63-$64 per ounce, represents a dramatic repricing from the levels at which the industrial demand case was broadly accepted. Whether that repricing is an overshoot depends almost entirely on how long the Iran conflict continues to keep energy prices elevated and Fed rate expectations hawkish.

What happens to silver next depends on one variable

The path forward for silver is unusually binary. If the Iran conflict de-escalates and energy prices pull back, the rate hike narrative collapses and silver's industrial demand case reasserts itself quickly.

The metal gained 5% in a single session when a brief ceasefire was announced in April before the conflict resumed.

If the conflict persists, the May CPI reading is followed by an equally hot June print, and the Fed moves toward actually hiking, silver faces additional downside. The metal is attempting to stabilize near $63-$64, but with limited upside as long as dollar strength and rate expectations remain where they are.

The longer-term fundamentals, supply deficits, industrial demand growth, AI infrastructure, and electrification are not reasons to buy silver today if the macro environment is actively working against it.

They are a reason to pay close attention to when that macro environment shifts.

Given how far silver has fallen from its January highs, that shift, when it comes, may be sharp.

Related: Bank of America has stark message for silver investors in 2026

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This story was originally published June 11, 2026 at 11:03 AM.