Silver prices crash 43% as geopolitics and helium shortages hit demand

Silver prices have fallen sharply over the past year, dropping 43% from their peak. The decline follows a mix of geopolitical shocks, rising energy costs, and shifting industrial demand. Analysts point to three major pressures hitting the market at once: higher interest rate expectations, helium shortages, and slowing factory output.

The metal's troubles began with geopolitical unrest in early 2026. Tensions in the Middle East, including the Iran conflict, initially drove investors toward silver as a safe-haven asset. But a stronger US dollar and market volatility soon reversed this trend, pushing prices down by 30% since March.

Industrial demand, which accounts for over 60% of silver use, has also weakened. The metal is critical for electronics, AI chip packaging, solar panels, and electric vehicle wiring. Yet rising energy costs and fears of central bank rate hikes have slowed factory activity, cutting into demand. The Federal Reserve now sees a 50% chance of a rate increase by October, while the European Central Bank and Bank of England are planning three or more hikes this year.

A third blow came from helium shortages. Qatar's Ras Laffan complex, which supplied nearly a third of the world's helium, was damaged in an attack. Helium is essential for chip manufacturing, and its scarcity threatens production—reducing the need for silver in packaging. Unlike silver, gold has held up better, supported by the People's Bank of China's 16-month buying streak and central banks' plans to boost reserves.

Silver now faces a prolonged period of economic strain. The combination of higher borrowing costs, disrupted supply chains, and weaker industrial output has created a challenging environment. Without a shift in these conditions, demand for the metal is likely to remain under pressure.