Silver Weakens, Dollar and US Yields Weigh on Sentiment
Silver prices continued their decline around $48.10/oz on Wednesday as a stronger US dollar and rising Treasury yields reduced the appeal of the non-yielding precious metal. Fed officials' "higher-for-longer" comments kept policy expectations tight, driving flows into dollar-denominated assets and triggering an unwinding of positions in the precious metals complex. A continued correction in gold also weighed on silver through its correlative relationship, while global risk appetite weakened after equity markets lost momentum.
On the fundamental side of demand, investors are still weighing mixed signals. The industrial outlook for China—the largest consumer of silver for electronics and solar panels—appears fragile despite policy support for the property sector. In Europe, sluggish manufacturing activity is restraining demand for industrial metals, but the medium-term trend remains supported by expansion in solar energy capacity, vehicle electrification, and demand for soldering/semiconductor components. Flows from silver ETFs have reportedly thinned in recent weeks, reflecting caution, while futures positioning data shows a reduction in net longs by speculators.
Going forward, silver's direction will be determined by global factory activity data, US inflation releases, and the Fed's comments. A strengthening dollar risks prolonging pressure, but a surprise downside in US data or additional stimulus from China could trigger short covering. Technically, market participants are monitoring the support area near the latest swing low and the gold-silver ratio; a breakout of support opens the door to a deeper correction, while a buying reaction in that area could trigger a tactical rebound.
Source: Newsmaker.id
