Silver Faces Profit-Taking and Technical Breakdown as Market Deficit Narrows

Silver prices entered June 25, 2025, on the defensive, stabilizing near $35.97 per ounce after a volatile 24 hours that saw the metal retreat sharply from 13-year highs.

Data from TradingView at 06:24 UTC confirms this price, with the Indian MCX market reflecting similar firmness at ₹104,876 per kilogram, up 0.62% on the day.

The correction follows a period of aggressive profit-taking, as traders reacted to both shifting fundamentals and a clear technical breakdown. The latest Silver Institute data shows the global deficit is set to narrow by 21% in 2025, falling to 117.6 million troy ounces.

This change comes as total demand drops by 1% and supply grows by 2%. Industrial demand, which hit a record 680.5 million ounces in 2024, will likely remain steady, but jewelry and silverware demand is expected to soften.

Investment demand, especially for coins and bars, is rebounding outside the U.S., but remains well below peaks seen in previous years. The market’s four-year supply deficit, totaling 678 million ounces, continues to underpin the long-term narrative.

However, the short-term story has shifted. ETF flows, a reliable gauge of institutional sentiment, have reversed. The iShares Silver Trust (SLV) saw its Monday inflow wiped out, dropping to 14,675 tonnes.

In contrast, the Sprott Physical Silver Trust (PSLV) reported minimal changes after strong May inflows. Nearly half of all ETF inflows this year occurred in June, but the pace has slowed, signaling that large investors are locking in profits as volatility rises.

Geopolitical events have played a role in recent price swings. Rising tensions in the Middle East initially fueled a run to $37 per ounce, but subsequent U.S. military actions and statements from Washington triggered caution.

As risk appetite faded, silver’s rally stalled and reversed. Technical analysis of the daily and four-hour charts supports this cautious outlook. On the daily chart, silver trades below its 20- and 50-day exponential moving averages.

The breakdown below $36.43, a key support, and the absence of reversal patterns point to a bearish structure. The “three black crows” formation seen on shorter timeframes further confirms selling pressure.

Volumes remain robust on major exchanges, but open interest on the MCX has dropped sharply, suggesting traders are stepping back after the recent run.

With the global deficit narrowing and ETF flows turning negative, the market’s short-term bias remains to the downside unless buyers can reclaim the $36.25–$36.43 zone.

Macroeconomic factors, including persistent U.S.-China trade tensions and shifting interest rate expectations, continue to add volatility. Industrial demand for green energy and electric vehicles remains a bright spot.

However, for now, the market’s focus is on technical signals and institutional flows. Silver’s longer-term outlook remains constructive, but the near-term path favors caution as the metal digests its rapid spring rally.

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