Silver Market Takes Hawkish Hit Amid Tightening Supply Picture

The silver market took a sharp hit on Friday, plummeting 4.2% to $67.09 per ounce on the Comex, after Federal Reserve Chair Kevin Warsh delivered a hawkish address at the Jackson Hole symposium.

Warsh's speech sparked concerns that the Fed may tighten monetary policy further, which would raise the opportunity cost of holding silver and bolster the dollar, weighing on dollar-denominated commodities like silver.

However, despite the short-term volatility, the fundamental narrative for silver remains intact. The Silver Institute projects a structural market deficit in 2026, with supply-demand gap estimated between 46.3 million and 50 million ounces.

The mine production is expected to contract by 0.3%, while demand for physical investment products such as coins and bars is forecast to climb roughly 7%. The tightening squeeze in the by-product markets that silver miners depend on also raises concerns about expanding physical silver supply in the near term.