Silver Falls 22% in Q2 Despite Supply Deficits, Sprott Says Long-Term Bull Case Intact

According to Sprott Inc. managing partner Paul Wong, cited by Kitco News, silver prices fell $16.57/oz or 22.04% in the second quarter ended June 30, marking the worst quarter since early 2020, with June recording the largest monthly decline since September 2011. The sharp selloff was driven by a hawkish Federal Reserve rate hike and U.S. dollar strength, triggering what Wong described as "capitulation-driven selling sentiment."

Despite the volatility, Wong maintains that silver's fundamentals remain constructive. The market has sustained structural supply deficits for seven to eight years and is projected to continue running shortfalls for the foreseeable future, while industrial demand expands across solar, electric vehicles, AI infrastructure, and military applications. Monetary demand is also rising alongside uncertainty over currency debasement. Wong noted that the unwinding of outsized options positions magnified the recent price decline, with the options market now returning to normalized levels.