Silver Drops for 2 Days, But Remains Near Record
Silver weakened again on Thursday, falling for the second consecutive session, with prices dropping below $77 per troy ounce. This weakening occurred as the bullish momentum that had brought the precious metal near record levels earlier in the week began to lose steam.
The waning momentum has caused the market to enter a "cooling down" phase, where profit-taking is more readily apparent after a rapid rally. As a result, silver corrected, although it remains generally in the high-priced area.
From a macro perspective, pressure also came from the strengthening of the US dollar. Mixed US economic data provided an indecisive signal regarding the direction of the Fed's policy, forcing the market to hold aggressive positions while awaiting confirmation from subsequent data.
Regarding interest rate policy, the market currently assesses a high probability that the Fed will hold rates at its next meeting, but expectations of several rate cuts this year remain. This makes silver sensitive to any changes in interest rate expectations and dollar movements.
Despite the decline, silver remains near its record high because fundamental support remains intact: limited supply, solid industrial demand, and continued strong investment flows. On the geopolitical front, the Venezuela issue and escalating China-Japan tensions are also maintaining a layer of safe-haven demand.
Going forward, silver's direction will be heavily influenced by US employment data and the dollar's reaction. If the dollar continues to strengthen, silver risks a further correction. However, if the market again increases the likelihood of an interest rate cut, silver could quickly rebound.
Key Points:
- Silver fell for two sessions and briefly fell below $77/oz
- Rally momentum weakened, market entered a profit-taking phase
- Dollar strengthened, mixed US data leaves the Fed's direction unclear
- Markets continue to view interest rates as on hold, but a rate cut this year is still anticipated
- Silver's fundamentals remain strong: tight supply, solid industrial and investment demand, plus safe-haven support from geopolitics. (asd)
Source: Newsmaker.id
