Silver dropped to approximately $61 on the June 24 the six month lows after the Bank of America issued its most aggressive 2026 rate hike call on June 22, projecting the three 25 basis point moves in September, October and December. Deutsche Bank followed with two. Two distinct structural mechanisms that caused the January February crash, and both have since fully discharged. Money managed by COMEX remains at 23% of the July 2025 peak, a level that has appeared only twice in the past 18 months, each time preceding a significant recovery. Todayâs May PCE is the first check on whether the market is right to price BofAâs full three hike path or whether Mayâs inflation was as energy driven as the CPI data suggested us.
That was 75 basis of Fed tightening this year three moves, September, October, December policy rate ending at 4.25 to 4.50%. Deutsche Bank followed the same day with a two hike call. By the next morning CME FedWatch had December above about 88%.
Silver noticed. Down 4.2% on June 23 alone, $66 to $62, then $61 on June 24 that is the Lowest level since late December 2025. Two days.
The committee voted 12 â 0 to hold at the June 17 meeting Federal Reserve, FOMC statement, June 17, 2026. That vote was unanimous. The dot plot ran differently: 9 of 18 officials who submitted projections saw at least one hike by the year end, with Chair Warsh declining to submit one Federal Reserve, Summary of Economic Projections, June 17, 2026. The BofA call has since pulled market pricing further in the hawkish direction.
Todayâs May PCE report the Fedâs preferred inflation gauge, due at 8:30 AM EDT is the first read on whether BofAâs call has data behind it or not. Aprilâs core PCE ran at 0.2% MoM and 3.3% YoY Bureau of Economic Analysis, Personal Income and Outlays, April 2026. Wall Street consensus for May is 0.3% MoM and 3.4% YoY Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters, Q2 2026. May core CPI came in at 0.2% MoM below its own 0.3% consensus a reading that historically pulls core PCE to a comparable or lower level Bureau of Labor Statistics, Consumer Price Index, June 10, 2026.
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See all Silver forecastsCitigroup estimated roughly $6.8 billion in silver futures sold during the Bloomberg Commodity Index rebalancing window, about 12% of COMEX open interest, as silverâs 147% 2025 gain had pushed its BCOM weight to 9.6% against a 3.94% target CME Group, COMEX Silver futures. Silver fell from approximately $83 to $75 then it fully recovered. By January 29, silver had reached its $121.64 that is its all time high.
Phase 2 : The Warsh crash (January 30 â February 6):
Kevin Warshâs Fed Chair nomination landed January 30. Algorithmic selling hit a market already sitting on changed ground.
CME had switched to percentage based margins on the January 13, then raised them from 9% to 11% on January 28. One day before the high. Three more hikes through February 6 pushed silver to a trough around $64.
One mechanism would have been enough but Both fired.
The BCOM weight currently sits at 3.94%. Margins are at 18% and to replicate the February cascade from here, you would need to push them to 25 to 30%. That has no historical precedent at these price levels.
The mechanism that ran twice isnât set up to run again.
Financial Analysis
Positioning: 23% of Peak
The CFTCâs disaggregated Commitments of Traders report for June 9, 2026 shows that the managed money was net long at 10,403 contracts that is roughly $3.2 billion notional at $61 CFTC Disaggregated COT, Futures Only, COMEX Silver, June 9, 2026. Against the July 2025 peak of 44,987 contracts, that is 23.1% of the cycle high. Just 2.3x the February 10 nadir of 4,569.
This weekâs selloff was systematic. The BofA call repriced the rate hike odds and the selling followed it. But it started from a base that was already historically thin. There was no crowded long to flush.
Why Silver Moves Faster Than Gold When Rate Expectations Shift
When both metals respond to the same rate catalyst, the default expectation is the proportional movement. Gold up X%, silver also up X%, ratio stays flat. Thatâs the theory but
Silverâs smaller market breaks it in practice. COMEX silver open interest runs around $31.7 billion notional. COMEX gold runs roughly $136.9 billion CFTC Disaggregated COT, June 9, 2026.. The same dollar of inflow produces about 4.3 times the price impact in silver as it does in gold. The 4.3x figure is a structural feature of market size.
And with managed money sitting at 23% of the cycle peak, the order book is already thin. Each new inflow hits a market with less cushion than usual to absorb it.
The asymmetry shows up in the price move, rarely in the headlines.
2020: the ratio spiked to 123:1 at the COVID low, then compressed to 64:1. Silver gained roughly 140%. Gold gained 40%. 2008 to 2011: 90:1 compressed to 30:1. Silver gained over 400%. Gold gained 170% Federal Reserve Bank of St. Louis, FRED Gold/Silver Price Ratio.
Both times, a broadly accommodative environment hit a thin market and they produced something disproportionate. The ratio compressed hard. Both times it went well past the target zone.
The current ratio sits at 67:1 right now. Gold is around $4,100, silver is around $61.
Compress to 60:1 with gold flat and silver is at $68.3. Compress to 58:1 and youâre at $70.7. Neither of those is a heroic assumption. Januaryâs extreme was 46:1. The range being discussed here doesnât get close to it.
There is still room before this gets unusual.
Position and Risk
Mayâs 4.2% headline CPI was almost entirely energy. Energy accounted for over 60% of the monthly gain. Core CPI ran at 0.2% month on month that is below the 0.3% consensus.Bureau of Labor Statistics, Consumer Price Index, June 10, 2026.
Core PCE typically tracks core CPI with a lag. A May core PCE print at 0.2% tells the Fed the same thing the CPI already said: the price surge came from Hormuz, not from demand. Rate hikes donât fix a closed strait.
That reading, if it holds it slows BofAâs September clock. And a slower September clock opens the path toward $68 to $71.
That is my read. The data has to cooperate first.
May core PCE prints at 0.2%. September hike probability reprices below 60%. The gold/silver ratio compresses from 67:1 toward 60:1. Silver at $68 to $71 within 60 days.
The BofA and Deutsche Bank scenario needs inflation to stay broad services, wages, demand driven. A soft print that traces back to energy undermines the whole premise. The hike clock slows, the rate fear unwinds, and the compression trade opens.
One number does a lot of work here. May core PCE is the number.
Core PCE at 0.3% or above and the base case doesnât run. BofAâs three hike path stays intact, dollar strength extends, and silver pushes toward $55 to $58 the zone that was resistance through 2022 to 2024 before the 2025 breakout. Old resistance becoming new support is a reasonable assumption. That is an assumption, one the data has to confirm.
A decisive weekly close below $58 changes the setup. At that point the 2025 breakout is in question and this becomes a different trade.
Silver reprices on rate expectations. Copper reprices on industrial demand. They share a commodity category and almost nothing else.
Goldman revised its 2026 refined copper surplus from 160,000 tonnes in December to 490,000 tonnes by April. The Iran demand shock fed straight into the outlook Goldman Sachs Research, Copper Outlook 2026. Thatâs a full reassessment in four months.
The two metals will not move together from here. Where one goes tells you very little about where the other goes
Conclusion
Silver is at six month lows. Both mechanisms that crashed it are spent. Managed money is at 23% of its July peak. The ratio is at 67:1 the widest since the conflictâs worst weeks. The BofA call pushed silver to a cheaper entry than this thesis had any right to expect.
Todayâs PCE print is the first test. A soft 0.2% starts unwinding the three-hike scenario. A hot 0.3% extends the pressure and the thesis waits. Either way, the next major window is July 28 to 29 the FOMC week, which lands the same week as the June PCE. Two catalysts, same week. The calendar doesnât give much room between them.
Underneath all of it, the Silver Institute projects a sixth consecutive annual supply deficit in 2026 46.3 million ounces Silver Institute World Silver Survey 2026. Six years of drawing down physical inventory. That doesnât move a price on its own. Itâs the condition that makes the price move harder when investment demand comes back.
It hasnât come back yet. Thatâs the setup.