Current macroeconomic factors continue to work against silver. The US Consumer Price Index (CPI) report for April came in above expectations, hitting a shocking 3.8% annual rate—a multi-year record.
Mounting inflationary pressure has pushed yields on 10-year and 30-year American government bonds higher, suggesting that the Federal Reserve (Fed) will keep interest rates elevated for longer. As a result, US Treasuries are now outshining non-income-generating precious metals.
Another hurdle is weakening industrial demand, which accounts for roughly 60% of global silver consumption. The Middle East crisis has sent shockwaves not only through the energy market but also across several related sectors, leading to logistical difficulties, rising freight costs and insurance premiums, along with supply chain disruptions. Producers of solar panels, electronics, and plug-in vehicles are now dealing with higher expenses and forced project delays, prompting cost-cutting measures and creating pent-up demand. Despite the long-term deficit in the silver market, the industrial segment—extremely sensitive to economic downturns and soaring energy prices—is likely to reduce its consumption of bullion.
Taken together, these factors have recently triggered heavy selling in the precious metals market. On some days, silver quotes fell by 7%–8%, retreating to the $75–$76 range. The technical setup warns of further downside toward the next significant support level at $70.
The final recommendation:
— Sell silver at the current price, aiming for $70 within a couple of months.
— Place a Stop Loss order at $77, just above support, to manage risks if the market moves against us.
This content is for informational purposes only and is not intended to be investing advice.
