Silver drops more than 3% to $64.78/oz

The August U.S. employment report came in significantly stronger than expected:

• Nonfarm payrolls: +162,000
• Consensus: roughly +53,000–56,000
• Unemployment rate: 4.1%

The data strengthened expectations that the Federal Reserve can keep monetary policy restrictive and increased speculation about further tightening.

Higher rates and Treasury yields are negative for silver because the metal provides no interest income. A stronger U.S. dollar adds pressure by making dollar-denominated metals more expensive for foreign buyers.

The 10-year U.S. Treasury yield moved toward 4.8% following the report, while the dollar strengthened.

Silver breaks below $65

The decline pushed spot silver through the $65/oz level.

A sustained break below $63.80 would put approximately $62.5 in focus. To improve the short-term technical picture, silver would first need to recover above $65.3–$67.2.

Silver remains highly volatile

Silver traded above $100/oz in January 2026 and briefly exceeded $120/oz before a sharp correction. From $120 to $64.78, the decline is approximately 46%. The metal subsequently reached around $54.74 in July, recovered toward $71.54, but failed to sustain the rebound.

That leaves silver roughly:

• 46% below $120
• 9% below $71.54
• 18% above the July low of $54.74

Physical market remains in deficit

The price decline contrasts with relatively tight underlying supply fundamentals. According to the Silver Institute, the global silver market is expected to record its sixth consecutive annual deficit in 2026.

Key forecasts:

Recycling is expected to increase 7%, exceeding 200 million ounces for the first time since 2012.

Industrial demand is being pressured by reduced silver usage in photovoltaic manufacturing, while demand related to AI infrastructure, data centers and automotive applications remains supportive.

Oil adds to the rate risk

Brent crude is trading above $95 per barrel, while WTI remains above $92. Higher energy prices increase inflation risks. Persistent inflation would give the Fed more reason to maintain restrictive monetary policy, potentially keeping Treasury yields elevated.

For silver, this creates a negative macro combination:

higher oil → higher inflation risk → tighter Fed policy → higher yields → pressure on precious metals.

What matters next

The next major U.S. macro catalyst is the September 11 CPI report. A stronger inflation reading could reinforce expectations for tighter Fed policy and increase downside pressure on silver.

The key levels to watch are:

• Downside: $63.80 → $62.57

• Upside: $65.26 → $67.21 → $70.76

At $64.78/oz, silver is trading close to an important technical support zone. A break below $62.5–$63.8 would materially weaken the short-term structure, while a recovery above $67.2 would reduce immediate downside pressure.

Despite the current selloff, the physical silver market remains in a structural deficit. For now, however, Fed expectations, Treasury yields and the U.S. dollar are dominating price action.