Silver Price Forecast: Fed Hike Threatens Next Rally
The largest silver ETF experienced a $29 million outflow in the five trading days through September 8, while major gold ETFs attracted almost $2 billion. This divergence is significant because silver is more sensitive to both investment positioning and industrial expectations.
The Silver Institute predicts that mine supply will remain broadly constrained in 2026, with industrial demand being reshaped by high prices, particularly through lower silver usage in photovoltaics. The market can experience weaker investment flows without suddenly becoming well supplied due to a large share of silver being produced as a by-product of lead, zinc, copper, and gold mining.
A hawkish Fed could lift real yields and strengthen the dollar, putting immediate pressure on futures prices, while a dovish signal could do the opposite. However, the physical market operates on a different clock, with warning signs appearing through declining inventories, tighter availability, premiums, and stronger competition for deliverable metal.