Silver prices fell sharply in June

Silver prices trended weakly downward earlier in July but halted their decline and rose this week. According to the SunSirs commodity market analysis system, the market quote for silver on July 22, 2026, was 14,588.67 RMB/kg; this represents a 3.76% increase from the spot price of 14,059.67 RMB/kg at the beginning of the month (July 1) and an 8.46% rise from the low spot price of 13,450 RMB/kg recorded last Friday (July 17).

The reasons for the strengthening of silver prices this week are as follows:

1. Weak US employment and manufacturing data fueled market expectations of interest rate cuts, leading to a decline in the US dollar and Treasury yields—factors favorable to precious metals;

2. Silver had previously been deeply oversold; a wave of concentrated short-covering triggered a rapid short-term rally;

3. Recurring geopolitical tensions in the Middle East drove safe-haven capital into silver;

4. A persistent global supply-demand deficit for silver, with demand from the photovoltaic and new energy electronics industries providing a floor for prices;

5. The gold-to-silver ratio was excessively high and silver was undervalued, prompting arbitrage capital to enter the market and drive a catch-up rally.

A market rebound following a sharp decline

The current rise in silver prices represents a corrective rebound following a sharp decline. The primary macroeconomic driver is the marginal cooling of expectations regarding Federal Reserve rate hikes. Fed officials have acknowledged a slight easing of inflation and refrained from signaling aggressive rate hikes; this has dispelled the market's extremely pessimistic anticipation of "persistently high interest rates," thereby weakening the major bearish factor that had previously weighed on silver.

After silver prices fell to a low, a large number of speculative short sellers had previously entered the market, betting on a decline. However, as prices hit a new low for the year, these short sellers closed their positions en masse—driven by the dual impact of easing tensions in the Middle East and weaker economic data—thereby halting the slide and fueling a recovery in silver prices.

Market Outlook

Current price trends for precious metals suggest a rebound following a decline rather than a fundamental trend reversal. From a technical perspective, the market remains within a medium-term downward channel; the recent movement represents a correction from oversold levels rather than a breakout above key moving average resistance. Future sustainability depends on upcoming U.S. data regarding inflation and employment. In the short term, precious metal prices are expected to remain relatively strong but with limited upside potential, likely characterized by volatility with an upward bias.

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