Silver Faces Critical 60.90 Support Level

Silver trades near 60.90 dollars. This level acts as a critical support zone. The market faces conflicting pressures. Federal Reserve policy affects paper prices. Physical supply constraints affect spot prices. Investors watch these two forces closely.

The largest silver ETF lost 29 million dollars. This outflow occurred over five trading days. Gold ETFs gained nearly 2 billion dollars in the same period. This divergence highlights silver's sensitivity to yields. Industrial demand remains a key driver.

ETF Flows Show Cooling Demand

Investment flows have slowed recently. The 29 million dollar outflow signals caution. This happens while gold attracts massive inflows. Silver is more sensitive to rate changes. It is also more sensitive to industrial expectations.

One week of outflows does not erase deficits. The Silver Institute expects constrained mine supply. Industrial demand is reshaping the market. High prices reduce usage in photovoltaics. The shortage has not disappeared.

Supply Responds Slowly To Price

Silver production is often a by-product. It comes from mining lead, zinc, and copper. Higher silver prices do not trigger new mines. Production decisions follow primary metal economics. New supply takes years to arrive.

The Fed controls the paper price. It does not control the physical market. A hawkish stance lifts real yields. This strengthens the dollar and pressures futures. The physical market operates on a different clock.

Technical Structure Defines Next Move

Silver reached a high of 71.68 dollars. This completed a five-wave impulsive move. Price rejected this area and entered a correction. The market now trades in the 60.90 to 63.20 zone. This area overlaps previous resistance and Fibonacci levels.

Holding 60.90 preserves the uptrend structure. A break below this level suggests a correction. It could bring price back to 54.50. Buyers have started responding at current levels. The outcome depends on the FOMC decision.

GN auto markets/commodities: silver prices report indicates high risk. High prices can become self-defeating. Industrial substitutions may reduce consumption. Tighter monetary conditions could weaken investment demand. The structural deficit may shrink but not vanish.