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By Bas Kooijmanis, CEO and Asset Manager of DHF Capital S.A
Silver futures tumbled on Tuesday for a second session as a strengthening US dollar and mounting inflation concerns eroded demand for non-yielding assets. The greenback gained traction amid rising tensions in the Middle East. Higher oil and fuel costs have revived inflation concerns, pushing bond yields upward and forcing investors to reassess the Federal Reserve’s policy trajectory.
Recent data reinforced this shift. A firm PPI print and resilient manufacturing PMI, showing persistent input price pressures, could delay expectations for the next Fed rate cut.
Beyond macro headwinds, structural changes in demand are emerging. Solar manufacturers, squeezed by silver’s sharp price appreciation over the past year, are accelerating efforts to move to substitutes in photovoltaic production. Industry projections suggest industrial fabrication could decline modestly in 2026 due to thrift and substitution.
Looking ahead, silver could remain sensitive to geopolitical developments. Prolonged tensions could continue to lift US Treasury yields and weigh on the metal.
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