COMEX silver futures for July delivery fell 2.03% to settle at $64.91/oz. This is the lowest close since June 8. The selloff accelerated after the US May industrial production data showed a 0.3% month-on-month decline, missing expectations of flat growth.
Silver is the most industrial of the precious metals. Over 50% of annual demand comes from industrial applications, including solar photovoltaics, electronics, and brazing alloys. The weaker IP print raised concerns about near-term industrial demand.
The gold-to-silver ratio widened to 64.3, up from 63.2 last week. A rising ratio suggests silver is underperforming gold, which aligns with the industrial demand narrative. The ratio had compressed to 58 in early May when both metals were rallying.
On the supply side, silver mine output continues to face headwinds. Fresnillo, the world's largest primary silver producer, reported a 2% decline in Q1 output due to lower ore grades at its Saucito mine. But this supply constraint is well known and already priced.
Silver buyers should watch the $64 support zone. A break below that opens a path to $62. Layered buying in the $63-65 range provides a reasonable entry for H2 coverage, especially given medium-term demand from solar and electronics sectors.