Silver Prices Surge on Treasury Buybacks Amid Structural Supply Squeeze
Silver prices have reached their strongest level in two months at $68.20 per ounce, but this rebound is largely driven by monetary policy rather than industrial fundamentals.
The US Treasury's surprise decision to double its buyback operations for long-dated government bonds has sparked a rally in silver, as the metal benefits from lower interest rates and a decrease in bond yields.
This move has reignited appetite for silver, which pays no interest, but the market remains torn between policy impulses and fundamental data.
The physical market is experiencing a structural squeeze, with supply failing to keep pace with demand for years. The Silver Institute projects 2026 will mark the sixth consecutive year of deficit, with a shortfall of roughly 67 million ounces.