The price of silver has crashed by more than half since the end of January, from nearly $122 per ounce to below $60 in late June. The brutal sell-off has pulled down gold as well, now trading under $4,000, and is hitting Poland’s KGHM, the world’s second-largest silver producer, hard on the Warsaw Stock Exchange.
The precious metals market is undergoing a severe correction. Just five months ago, in late January 2026, an ounce of silver was worth around $122, while the dollar traded at roughly 3.5 złoty. By Monday, June 29, silver had fallen below $60, and the dollar strengthened to 3.75 zł. Gold, after slipping under $4,000 for the first time since last November, is now consolidating near $4,050–$4,100.
Investors are shifting capital toward bonds and the dollar as inflation persists and expectations of interest rate hikes grow. These developments are unfavorable for precious metals, which typically thrive in a low-rate, weak-dollar environment. Silver, in particular, has seen its industrial demand falter.
The causes of the silver slump
Silver’s recent rally was largely driven by soaring demand from photovoltaic manufacturers. However, producers are now aggressively cutting costs by replacing silver with cheaper alternatives, dampening demand. The metal’s dual nature – both industrial and investment – makes it especially vulnerable in times of monetary tightening.
The scale of the decline is staggering: from $120 to under $60 per ounce. Yet, considering that in July 2025, silver was trading at just $35, there is still room for further downside. The long-term uptrend from the pandemic era appears to have reversed.
Among the most bullish institutions remains Bank of America, which argues that silver could eventually be reclassified from an industrial metal to a precious one, potentially supporting a higher valuation. Still, for now, market sentiment is overwhelmingly bearish.
KGHM in the line of fire
KGHM, listed on the Warsaw Stock Exchange, produced 1,347 tonnes of silver in 2025, up slightly from 1,341 tonnes a year earlier. As the world’s second-largest silver miner, its fortunes are closely tied to the metal’s price.
Over the past five days, KGHM shares have fallen more than 10%, roughly mirroring silver’s decline. Over the past month, silver lost nearly 20%, while KGHM stock dropped about 7%, suggesting some resilience from the company’s diversified copper operations. Still, the correlation remains strong, and further losses in silver could push the stock lower.
Analysts warn that unless silver stabilizes or the industrial demand outlook improves, KGHM could face continued pressure. The company’s global mining assets on three continents offer some diversification, but silver remains a key profit driver.
Źródło: WNP.PL, Fot. Scottsdale Mint / Pexels
