New York: Silver prices fell more than 6% On Friday, the worst drop in a single day in six months. This was part of a larger drop in the precious metals market. The decrease comes after a big surge earlier in the week, when investors were less worried about the quality of U.S. credit and trade relations between China and the U.S. got better.
As of 1:09 p.m. in New York, the price of spot silver was $50.96 per ounce, which is 6.0% lower than it was the day before. The price of spot gold was 3.0% lower, and the prices of platinum and palladium also fell significantly.
Reasons for the Drop in the Market
The sell-off comes after U.S. Treasury yields rose further, thanks to fears about regional banks and their lending activity diminishing. The change in mood lowered demand for gold and silver as safe havens, which led traders to lock in profits after this week’s rise.
The historic silver squeeze in the London market, which had been pushing prices up in recent sessions, started to ease, which added to the pressure.
“The shortage in London is easing a bit from its worst levels, and as the regional disruptions settle down, there could be pressure and profit-taking,” said Nicky Shiels, Head of Metals Strategy at MKS Pamp SA.
How Investors Feel and What They Think
It looks like the London market pressure has been less urgent for investors to keep silver positions, which has led to a lot of people taking profits. In the meantime, a more solid outlook for U.S. credit markets and better diplomatic relations between Washington and Beijing made it less necessary to be defensive in commodities.
Analysts say that silver may keep being volatile in the short term, but the metal’s long-term fundamentals, which are based on industrial demand and inflation hedging, are still strong.
At 1:09 p.m. ET, here is a quick look at how precious metals are doing.
Spot Silver: down 6.0% to $50.96 per ounce
Spot Gold: Down 3.0%
Platinum and palladium both fell after silver.