In June, the price of silver plummeted by 21.86%

Silver prices fell sharply in June

On May 29, 2026, the silver market quoted 14185.67 yuan/kg, a decrease of 21.86% from the spot price of 18154.67 yuan/kg at the beginning of this month (6.1).
The general logic of silver operation in June is as follows:
The sharp drop in silver prices this month is due to the resonance of multiple factors, including the reversal of expectations of interest rate hikes by the Federal Reserve, the strengthening of the US dollar and bond yields, the retreat of safe haven funds, the stampede of speculative funds, and the weakening of industrial demand. The main reason is that the strong inflation and employment data in the United States have raised expectations for the Federal Reserve to raise interest rates. The hawkish signals released at the interest rate meeting have driven the real interest rates of US bonds and the US dollar index to rise simultaneously, reducing the attractiveness of interest free precious metals; Combined with the easing of geopolitical tensions in the Middle East and the concentration of safe haven funds leaving the market, the previous crowding of long positions triggered a stop loss stampede. At the same time, the slowdown in the growth of silver demand for photovoltaics weakened the support of industrial fundamentals. Silver itself has greater volatility elasticity than gold, and the decline is further amplified under the linkage of internal and external markets.
The Federal Reserve’s monetary policy expectations have completely reversed
Expected to fully switch from “interest rate cuts” to “interest rate hikes”; At the beginning of the year, the market bet on multiple interest rate cuts by the Federal Reserve in 2026, which was the core driving force behind the surge in silver prices in the first half of the year; However, the stickiness of US CPI and PCE inflation data in May and June exceeded expectations, and the resilience of non farm employment was extremely strong, with inflation falling short of the target.
On June 17th, the Federal Reserve’s interest rate meeting released hawkish signals; The interest rate remains unchanged at 3.5% -3.75%, but the dot matrix chart raises the annual interest rate expectation, with nearly half of officials expecting a rate hike within 2026; Walsh made it clear that anti inflation should be prioritized and liquidity should be tightened, and deleted the forward-looking wording of interest rate cuts.
Price significantly based on the probability of interest rate hikes; According to data from the Zhishang Exchange, the probability of the Federal Reserve raising interest rates in December has risen to over 86%, completely ending the logic of interest rate cuts.
The rise in real interest rates suppresses silver; Silver is an interest free asset, with a significant increase in nominal and real yields on 10-year US Treasury bonds. The opportunity cost of holding silver has skyrocketed, and funds have shifted from precious metals to fixed income assets in the US dollar and US Treasury bonds, putting immense pressure on silver prices.
Middle East geopolitical easing and collective escape of safe haven funds
In June, the US Iran conflict cooled down, and both sides reached a memorandum of understanding. The risk of navigation in the Strait of Hormuz was lifted, and the geopolitical panic premium quickly dissipated; In the first half of the year, a large amount of safe haven speculative funds flowed into gold and silver for hedging. After the risk landed, they concentrated on redeeming, selling and leaving, and gold and silver weakened synchronously.
The marginal weakening of industrial demand cannot offset macroeconomic pressures due to fundamental factors
The core industrial demand for silver comes from the photovoltaic industry. Currently, the photovoltaic industry is generally promoting silver reduction and silver substitution technologies, resulting in a continuous decline in silver consumption per unit of photovoltaic power. The growth rate of silver demand for photovoltaic power has slowed down and the increment is lower than expected; Although there has been an annual gap in global silver supply and demand for the sixth consecutive year, the market circulation stock is extremely large, and the short-term supply and demand gap cannot withstand the selling pressure brought by macro monetary policies. It can only support long-term prices and cannot prevent short-term sharp declines.
Silver’s high speculative attribute breaks through and experiences a stampede like sharp drop

The fluctuation range of silver is usually 1.5-2 times that of gold, and the long positions are extremely crowded in the early stage; In the early stage, long positions gained substantial profits. After the price fell below the key support level, programmed stop loss, long kill, and long stampede were triggered, and concentrated selling amplified the decline; COMEX’s net long positions in silver speculation have rapidly fallen from historical highs, while ETFs continue to reduce their holdings, leading to negative feedback and a decline in fund outflows.