Silver Crashes Again: Falls 8% to Below $65
Silver prices plunged again on Friday, dropping more than 8% to below $65 per ounce. This is the lowest level in about seven weeks, amidst a massive sell-off across various markets.
This silver decline occurred as the market deleveraged—many market participants reduced risky positions, disposed of assets previously purchased with leverage, and opted to hold cash. As a result, selling pressure became even more brutal.
Looking further back, silver is now down about 45% from its peak on January 29th. This means all gains this year have been virtually wiped out, and this is being called one of the sharpest declines since the 1980s.
In January, silver and other precious metals had "exploded" to record highs due to a combination of factors: geopolitical risks, economic uncertainty, and issues surrounding the Fed's independence, which fueled safe-haven demand.
The problem is, that rally was also fueled by speculative buying, including from traders in China. When a rally becomes too "frothy," prices become vulnerable to sharp reversals once sentiment shifts and people flock to the exits.
The pressure intensified after the US dollar rebounded strongly. One trigger was news of Kevin Warsh's nomination as the next Fed chairman—which the market viewed as more hawkish, supporting the USD and pressuring precious metals.
What makes silver even more extreme: its volatility isn't just a matter of industrial supply and demand, but also of massive speculative flows. When those flows reverse, its movements can be far wilder than other metals—and that's what's happening now. (asd)
Source: Newsmaker.id
