The May Consumer Price Index rose 4.2% year-on-year, pushing inflation above both the Federal Reserve’s target range and the 2-year Treasury yield. Although the Fed is expected to hold rates steady during its June 17 meeting, markets are pricing in a 60% probability of at least one rate hike by December. This "higher-for-longer" interest rate environment weighs heavily on silver, which remains sensitive to both investment shifts and potential cooling in industrial demand.

Central banks continue to provide a floor for gold, maintaining aggressive accumulation strategies. The People’s Bank of China added 9.95 tonnes in May, marking 19 consecutive months of growth and bringing its total reserves to 2,331 tonnes. Poland has also emerged as a significant buyer, acquiring 14 tonnes in April and leading all nations with 45 tonnes purchased year-to-date. Spot gold recently climbed 3.47% to $4,364.84, while silver gained 4.18%, trading at $70.88 per ounce.

Supply dynamics are shifting in Mexico, where Minera Frisco is expanding operations despite stricter mining laws enacted in 2023. New production at the Ocampo project in Durango is slated for early 2027, with a first-phase target of 30 million silver-equivalent ounces. Additionally, the restart of the San Felipe project in Baja California is expected to boost output by mid-2026. These efforts follow a strong first quarter for Minera Frisco, which saw silver production rise 45% year-on-year to 1.51 million ounces.