Silver prices advanced in today's trading session, extending a rally fueled by safe-haven demand and a confluence of bullish fundamentals. According to data from Bitcoin World, the precious metal tracked gains in the broader precious metals complex, with gold also moving higher. A weaker U.S. dollar and falling bond yields reduced the opportunity cost of holding non-yielding assets, providing a tailwind for silver.
Fresh capital flows into COMEX futures added a new catalyst. Analyst Bob Coleman highlighted that total open interest in COMEX silver contracts rose over 10% in the past month, climbing from 97,000 to 107,000 contracts. This surge signals renewed institutional positioning and could fuel the next leg upward, challenging skeptics who have questioned the exchange's integrity. Coleman noted on X that the data is a simple rebuttal to calls for the COMEX's demise, showing real money flowing back into the market.
Silver's dual role as both a monetary and industrial metal is underpinning the rally. The Silver Institute confirmed that the market is in its sixth consecutive year of a severe global supply deficit, with a projected shortfall of 46.3 million troy ounces. The situation is being worsened by a supply shock: Peru's energy crisis has forced twelve major mining facilities to adopt staggered production schedules, leading to an expected 5% to 8% drop in silver output for May and June. This structural deficit is providing a hard floor under prices, counterbalancing macroeconomic headwinds.
Geopolitical developments also played a role. The signing of a U.S.–Iran peace memorandum and the reopening of the Strait of Hormuz briefly eased energy-driven inflation fears, sending crude oil down nearly 5% and sparking a 1.34% one-day surge in silver. However, the Federal Reserve kept rates unchanged and left the door open for a potential hike, which capped gains. The dollar index maintained strength near 99.40, keeping silver from breaking above the key $70.56 resistance level.
From a technical perspective, silver remains range-bound but with a bullish bias. Prices are oscillating between $66.81 and $70.00, with the RSI around 45 indicating limited buying power. A break above $70.00 could trigger a short-covering rally toward $71.45 and eventually the mid-$70s, while a failure to hold $66.81 may lead to a test of $63.15. Traders are closely watching these levels amid the fresh capital inflows and tightening supply.
