Silver Holds Steady as Supply Squeeze and Rate Cut Bets Shape Market

Silver prices traded near $36.30 per ounce on June 12, 2025, as official charts and market data reveal a market balancing robust industrial demand with persistent supply constraints.

The latest figures from India confirm a correction in spot silver to ₹1,05,750 per kilogram, down from the previous day, mirroring a slight dip in global spot prices after a recent rally.

The past 24 hours saw silver consolidating after reaching 13-year highs near $36.90. This pause follows a surge driven by expectations of U.S. Federal Reserve rate cuts, a weaker dollar, and ongoing geopolitical risks.

U.S. inflation data released yesterday showed the Consumer Price Index rising just 0.1% month-on-month and 2.4% year-on-year, the lowest in over a year.

The dollar slid to a two-month low, making silver more attractive to international buyers. Automated buy orders triggered as the market broke above key technical levels, with traders now eyeing $37.12 as the next resistance.

Market fundamentals remain tight. The World Silver Survey projects a 117.7 million ounce deficit for 2025, marking the fifth consecutive year of shortfall. Global mine output is expected to reach just 835 million ounces, a 7% drop from a decade ago.

This decline stems from lower ore grades, resource depletion, and rising costs across major producing regions. Meanwhile, industrial demand—especially from solar, electronics, and electric vehicles—continues to absorb available supply.

Silver Extends Uptrend on Record Industrial Demand

The Silver Institute reports industrial usage hit a record 680.5 million ounces in 2024, and this year’s demand remains strong. Investment flows reflect this tension. Silver ETFs have attracted ₹853 crore in net inflows in May alone, nearly three times the amount seen in gold ETFs.

Since March, silver ETF inflows total ₹2,277 crore, underscoring growing investor interest. Market participants continue to favor silver as a hedge against both inflation and macroeconomic uncertainty.

Technical analysis of the attached charts further supports the current narrative. The daily chart shows silver trading well above its 50-day and 200-day moving averages, confirming a strong uptrend.

The Relative Strength Index (RSI) stands near 68, indicating momentum remains bullish but is approaching overbought territory. The MACD on the daily chart remains positive, signaling continued upward momentum.

On the 4-hour chart, silver consolidates above key support at $36.02, with the RSI cooling from overbought levels and the MACD showing a slight bearish crossover. This suggests a short-term pause or minor pullback, but the broader trend remains intact.

In summary, silver’s price action over the last day reflects a market caught between strong industrial demand, persistent supply deficits, and shifting macroeconomic signals.

As traders await further U.S. data and central bank decisions, silver’s fundamental story remains one of scarcity and strategic demand, with technicals pointing to continued volatility but no immediate reversal.

The market’s next move hinges on whether support holds above $35.75 and if resistance at $37.12 can be decisively breached.

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