Silver Rebounds Sharply, Despite Pressure
Silver recovered from a sharp decline in the previous session, with prices climbing back above $75 an ounce on Tuesday, after falling 9% the previous day. Although profit-taking and tighter margin requirements on exchanges exerted pressure, the white metal remained on track for a 33% monthly gain, driven by ongoing supply shortages. Gold also posted a slight gain, despite its largest decline in two months.
Despite the short-term price correction, both silver and gold remain on track for their best annual performance since 1979. The silver price rally was supported by strong demand from speculative investors in China, as well as large purchases by central banks and inflows into precious metals-based ETFs. However, recent price fluctuations have been largely driven by technical actions, such as profit-taking and position adjustments.
Exchanges also moved to curb risk by raising margins on Comex silver futures contracts. This forced most traders to close their positions. However, physical supply shortages and trading restrictions in global markets, particularly those influenced by US policy, remain the main factors driving the prices of silver and other precious metals.
The continuation of this positive trend also reflects a larger supply deficit and concentrated inventories in the market. Analysts at Motilal Oswal Financial Services Ltd. noted that the silver market is undergoing a shift in the way prices and trade are determined. Spot silver prices rose 5.2% to $75.87 per ounce, while platinum and palladium also experienced significant gains after significant declines in the previous session.
With evolving market dynamics and heightened geopolitical tensions, silver and other precious metals are expected to remain a favorite asset for investors seeking a safe haven, especially with the potential for looser monetary policy in the future.
Source: Newsmaker.id
