Silver prices have declined over $2 in the past few days, falling from a high of $26.12 (Kitco Ask) per ounce on May 10 to a low of $23.73 per ounce on May 16. This decline has been attributed to a number of factors, including the ongoing war between Russia and Ukraine, the recent lockdowns in China, and technical factors that have lead to a breakdown of the $24 downward support level.
While some of these ongoing world issues have affected many markets, other factors including trading on the futures markets, the uncertainty resulting from the recent bank collapses and market sentiment are in play.
Silver prices have been pressured by technical factors lately. After a surge in demand due to money shifting from collapsed banks, the market has weakened somewhat. Silver prices have been trading in a relatively narrow range for several weeks, and they have recently broken below a key support level. This has led to increased selling pressure and has caused prices to fall. This may be due to the strength of the US dollar as well as the stock market holding through inflation and jobs reports and rising interest rates.
In addition to economic trends, some ongoing global issues may be factoring in on the current decline.
The ongoing war between Russia and Ukraine has caused investors to sell off risky assets, such as silver. This is because the war has increased uncertainty about the global economy and has led to concerns about inflation and rising interest rates. Silver is considered to be a risky asset, as its price can be volatile. When investors are feeling uncertain about the global economy, they tend to sell off risky assets, such as silver.
The recent lockdowns in China have also weighed on silver prices. This is because China is a major consumer of silver, and the lockdowns have disrupted supply chains and caused businesses to reduce production. Silver is used in a variety of industrial applications, including in the production of electronics, solar panels, and batteries. When China’s economy slows down, it reduces demand for silver, which can lead to lower prices.
Will Silver Prices Continue To Decline?
The decline in silver spot pricing is likely to continue in the near term, as the factors that are contributing to it are not expected to change anytime soon. The ongoing war between Russia and Ukraine, the recent lockdowns in China, and technical factors are all likely to keep silver prices under pressure in the near term.
These are just some of the factors that may be contributing to the decline in silver spot pricing. With futures traders and institutional investors in play, it is impossible to predict how long the current decline will last.
People looking to hold silver as a hedge against inflation may take advantage of this near 10% dip in spot pricing. Short term investors may have a risky bet on whether the market will rebound to recent highs. As with any investment due dilligence is recommended.
With a 52-week silver price high over $26, while the 52-week low under $18, the current price sits in the middle. Bullish investors looking for a long-term up trend will be buying dips like this.
If you feel like now is the time to take advantage of the current dip in prices, please get in touch with The Ohio Mint! We mint beautiful .999 silver rounds in Buffalo and Walking Liberty designs as well as custom stamping.