Key Points:
- On May 30, silver prices hit a low of $31.14 per ounce, then slightly recovered due to weak US GDP data and pending home sales figures.
- Rising bond yields, hawkish Fed commentary, inflation concerns, and weak auction results have impacted silver prices.
On May 27, silver prices plummeted, reaching their lowest point since May 30, at $31.14 per ounce. However, the market saw a slight recovery on the same day, driven by weaker-than-expected US GDP Price Index data for the first quarter and disappointing pending home sales figures for April.
Factors Behind Silver’s Recent Price Moves
Several key factors have recently influenced silver prices. Rising bond yields have exerted downward pressure on precious metals, including silver, as higher yields often make non-yielding assets less attractive. Hawkish commentary from Federal Reserve officials has further contributed to market volatility, with discussions of potential rate hikes heightening uncertainty.
Persistent inflation concerns have also played a role as investors weigh the implications for monetary policy and commodity prices. Additionally, weak auction results have highlighted market apprehensions, while Fed’s Kashkari has warned about possible rate hikes.
Rising US Yields and Price Impact
US bond yields surged recently, primarily due to weak auction results. The increased yields have negatively impacted silver as investors shift towards fixed-income assets that offer better returns in a rising rate environment. This dynamic underscores the interconnectedness of bond markets and commodity prices, with fluctuations in one often influencing the other.
Inventory Drops to 298.46 Moz
COMEX silver inventory levels have changed from 299.04 million ounces (Moz) to 298.46 Moz. Despite this decrease, the inventory remains at its highest since January 2023. This stockpile reduction can impact market sentiment and pricing, as lower inventories might signal tighter supply conditions.
Global Silver ETF Holdings Rise to 80.60 Moz
Global silver ETF holdings provide another crucial insight into market trends. As of May 29, holdings rose to 80.60 Moz, slightly from the previous week’s closing level of 80.686 Moz. This modest increase indicates sustained investor interest in silver ETFs, reflecting a broader trend of using these financial instruments for exposure to precious metals.
China’s April Silver Imports Exceed 340 Tons
Chinese silver imports have shown significant activity, driven by robust demand and diminishing stocks. In December, imports hit a three-year high of approximately 390 tons, and in April, they rose again to over 340 tons, surpassing the monthly five-year average of 310 tons. Strong Chinese demand limits downside risks for silver prices, as the country’s appetite remains a critical global market factor.
