Silver squeeze fades, but the supply crunch persists

Silver’s late-2025 squeeze has largely dissipated, and the effort to rebuild vault inventories is starting to look less like a clear-cut bullish driver. Still, the bigger backdrop hasn’t changed: the market is facing a sixth consecutive annual supply shortfall. Silver is trading near $60 an ounce at the time of writing after a steep pullback that has roughly halved prices since January. The metal is down about 51% from the Jan. 29 peak of $121.62 and sits roughly 15% below its end-2025 close around $71, even though it remains well above year-ago levels. The shift has been driven primarily by monetary forces. A more hawkish Federal Reserve under new chair Kevin Warsh has coincided with the U.S. dollar pushing to one-year highs. The 2026 Iran war has weighed on silver rather than supporting it: war-driven inflation has kept the Fed on a tightening bias and the dollar firm, and a higher expected rate path increases the opportunity cost of holding a non-yielding metal—undercutting the typical safe-haven boost often associated with conflict. Full commentary at Kitco.