Silver price forecast: will a hawkish Fed derail silver’s charge towards $60?

Silver traded near $57.90 an ounce on Thursday as investors looked beyond the Federal Reserve’s decision to leave rates unchanged and focused instead on the unusually hawkish division behind it.

The white metal surrendered some of its post-meeting momentum during Asian trading, with spot silver quoted at $57.86.

The Fed’s 9-3 vote showed that pressure for tighter policy is building inside the central bank, even as officials chose not to act immediately.

Unlike gold, silver must also contend with its exposure to manufacturing, leaving the price sensitive to both borrowing costs and industrial demand.

Three dissents expose a tightening bias

The Fed kept its benchmark rate at 3.5% to 3.75%, but Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan all preferred a quarter-point increase.

Chair Kevin Warsh reiterated the central bank’s commitment to restoring inflation to its 2% target but provided little clarity on the timing of the next move.

That leaves silver in an awkward position. The unchanged rate reduces the immediate opportunity-cost pressure on non-yielding assets, yet the three dissents indicate that further tightening remains firmly under consideration.

A stronger dollar would also weigh heavily on silver because the market is smaller and generally more volatile than gold.

The retreat therefore reflects caution over the policy path rather than a decisive collapse in demand.

Industrial demand tempers the recovery

Silver’s industrial role is becoming a bigger part of the price debate.

The Silver Institute expects global industrial fabrication to decline 2% this year to about 650 million ounces, a four-year low.

The weakness is expected to be concentrated in the solar industry.

Installations are still rising, but manufacturers are reducing the amount of silver used in each panel and substituting other materials where possible.

That trend weakens one of the strongest arguments behind silver’s earlier rally.

Electronics, solar equipment and other industrial applications still absorb substantial volumes, but high prices are encouraging users to economise.

It also means silver may not track gold closely.

Safe-haven demand can lift both metals, while concerns about manufacturing or global growth can quickly restrict silver’s upside.

Physical tightness limits the downside

The supply picture remains supportive despite softer fabrication.

The Silver Institute expects the market to record a sixth consecutive annual deficit in 2026, with demand exceeding supply by about 67 million ounces.

Physical investment is forecast to jump 20% to a three-year high of 227 million ounces.

Middle East tensions add another source of volatility.

President Donald Trump pledged a forceful response after Iran targeted a US military base in Jordan, and the US subsequently launched fresh strikes against Iranian sites.

For silver, escalation cuts both ways. Defensive buying may provide support, but higher oil prices can reinforce inflation, lift bond yields and strengthen the case for another Fed increase.

Until those forces become clearer, $60 is likely to remain a difficult barrier rather than the start of a clean breakout.