From $75 to $57, what signals has silver's latest pullback revealed?

Wednesday, July 1,

is currently trading near $57.5/oz, with an intraday decline of about 1.9%, falling significantly from the early June highs; the daily chart also shows prices still close to the lower Bollinger band, MACD remains negative, and short-term pricing remains in a weak structure. Meanwhile, the 10-year US Treasury yield is around 4.47%, the

 

　　Silver pricing has switched to a growth-sensitive stage

　　The current core issue for silver is no longer just a linear game between inflation and interest rates, but whether "high financing costs can coexist with manufacturing resilience". This is also the fundamental reason why silver and gold trends tend to diverge. Gold primarily carries the attributes of credit, reserve, and safe haven, while silver is integrated into industrial chains including electronics, power, photovoltaic, automotive, and data centers, giving its price higher elasticity to growth expectations.

　　In May, the US manufacturing PMI recorded 54.0%, marking the fifth consecutive month of expansion, with the new orders index rising to 56.8%, the production index to 54.3%, and the price index still at a high level of 82.1%. In other words, the manufacturing side is not in total recession but in a complex combination of "demand persists, costs remain high, and employment is weak". For silver, this combination can both provide industrial demand support and amplify valuation pressure in a high interest rate environment.

　　Yields are still the ceiling for silver price rebounds

　　Silver has industrial attributes, but that does not mean it can escape interest rate pricing. In June, the Federal Reserve maintained the federal funds rate target range at 3.50% to 3.75% and emphasized that inflation remains above the 2% target, while stating that economic activity continues to expand at a solid pace. Such policy statements mean it is difficult for the market to quickly rebuild easing trades, and silver’s financial attributes continue to be restrained by real interest rates and the

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　　Currently, the 10-year US Treasury yield is around 4.47%, and the two-year yield remains above 4%, so the pressure of the yield curve on precious metals has not disappeared.

remaining above 101 also dampens the willingness of non-dollar funds to chase silver prices. The drop in silver price from above $75 in early June to around $57 is essentially the result of a simultaneous squeeze from previously high valuations, long positions, and interest rate revaluation. A short-term low price does not automatically mean that pressure has been fully released—the key lies in whether manufacturing data can prove industrial demand is sufficient to offset tighter financial conditions.

 

　　The key point of ISM data is not strength or weakness, but whether it worsens

　　The market’s focus on the US ISM manufacturing data tonight is not because a single month’s reading can determine the direction of silver, but because it will affect traders’ repricing of silver’s industrial attribute. If the data only falls moderately from 54.0 to near market expectations, it more likely signifies a slowdown in expansion momentum rather than a breakdown in demand. For silver, a slowdown in expansion and the end of expansion are two completely different pricing scenarios.

　　What’s more important is the sub-index structure. If new orders continue to expand, it means corporate capital expenditure and downstream restocking still have a basis; if the production index remains above 50, it indicates industrial end-demand is not obviously stalling; and if the price index continues to run high, it limits room for policy shifts, keeping silver prices capped by interest rates. Currently, silver is not simply a bet on growth or a bet on rate cuts, but is searching for a new equilibrium point between "industrial demand resilience" and "high interest rate suppression".

　　Structural demand remains, but the photovoltaic narrative has been repriced

　　From a medium- to long-term perspective, silver is still embedded in the industrial narrative. Industry institutions estimate that global silver demand in 2026 will be roughly flat, with industrial processing demand possibly declining by 2% to around 650 million ounces, mainly due to silver-saving and substitution effects from the photovoltaic sector; but data centers, artificial intelligence technologies, automotive, and other electrification applications will continue to support some industrial end uses.

　　This means the structural logic of silver has not disappeared; it has shifted from single photovoltaic-driven demand to diversified industrial scenario support. On the trading side, it is even more important to distinguish "long-term usage expansion" from "short-term price pressure". If financing costs stay high, the long-term story of industrial demand is unlikely to immediately translate into a price trend; but if manufacturing maintains moderate expansion, silver may continue to retain higher cyclical elasticity than gold.

Editor: Zhu Henan