Silver's selloff accelerated this week as the metal broke below $60 and tested $56.40 on June 25 before recovering slightly. The session low of $56.40 is the lowest since April 28. The decline has been relentless, with only one positive session in the past nine trading days.
The gold/silver ratio jumped to 69.8, up from 60.1 at the beginning of June. This rapid expansion signals that silver is underperforming gold in the current risk-off environment. Typically, silver outperforms gold during bull markets and underperforms during corrections, which is playing out sharply now.
Industrial demand concerns are compounding the precious metals selloff. PMI data from China and Europe came in below expectations this month, with the Caixin Manufacturing PMI falling to 50.2, barely in expansion territory. Silver has significant industrial demand exposure, with approximately 55% of annual demand tied to manufacturing, electronics, and solar panel production.
COMEX silver inventories have been drawing down, with registered stocks falling to 8,720 tonnes from 9,500 tonnes in early June, suggesting some physical buying at lower levels. But speculative liquidation has overwhelmed any physical demand support.
Silver at $57.91 is at a critical juncture. The next support is $55 (April low), then $50 (200-day MA). Buyers with silver exposure should watch the gold/silver ratio: if it breaks above 72, expect further downside for silver relative to gold. For physical procurement, the sub-$60 level is attracting interest from solar manufacturers, but wait for a weekly close above $62 to confirm stabilization.