A U.S.-Iran framework agreement reopened the Strait of Hormuz, erasing geopolitical energy premiums and triggering an immediate recalculation of global inflation risks. This macroeconomic shift directly impacted precious metals. Silver prices fell roughly 50% from a record intraday high of $121.79 per ounce in late January down to approximately $60 per ounce.
The post-peak collapse wiped out momentum-based speculation. This resulted in a 30% single-day price drop. That crash marked the largest one-day decline for the metal in almost half a century, according to a detailed report by MarketWatch tracking the 50% plunge.
The January price spike initially began after India enacted a December policy allowing domestic pension funds to purchase gold and silver for the first time. Short-term speculators flooded the market. Then the Strait of Hormuz reopened. Crude oil prices dropped rapidly. Markets adjusted their expectations for Federal Reserve interest rate cuts, altering the appeal of non-yielding assets and triggering the sudden speculator exit detailed in Kitco market analysis.
How Supply Deficits and Mining Valuations Project a $130 Rebound
The extreme price swings disrupted major silver-mining stocks throughout the first half of 2026. As of July 6, shares of Hecla Mining fell nearly 14% year to date. Wheaton Precious Metals saw a narrower decline, dropping about 2% over the same period.
But the futures market treating silver as a rate-sensitive trading vehicle ignores the physical supply chain. Core physical demand remains intact. The Silver Institute projects 2026 will be the sixth consecutive year of global supply deficits. This industrial demand establishes a hard floor for the metal’s physical value.
Analysts expect the metal to build a solid trading base between $58 and $62 over the near term. If industrial consumption holds, market projections indicate silver could close the year around $80 per ounce. Forecasts for next year place the metal testing the $110 to $130 range, driven entirely by fundamental supply shortages rather than retail momentum trading.