Silver prices fell by about 10% to trade below $76 an ounce, continuing a sharp reversal in direction, with a broad wave of liquidation in financial markets prompting investors to sell precious metals to provide liquidity.
The accelerated decline came despite US Treasury yields falling to their lowest levels in several months, suggesting that the move was driven more by liquidity pressures and a faster unwinding of investment positions, following a recent extended rally in the metal, and not just by the repricing of interest rate expectations.
Selling pressures extended to other commodities, with both gold and copper suffering significant losses, indicating cross-cutting commodity pressures within global markets.
Despite continued market expectations of weaker inflation data and pricing in the likelihood of the Federal Reserve cutting interest rates twice this year, immediate flows were driven by deleveraging.
The dual nature of silver, as both a monetary and industrial metal, has also contributed to amplifying volatility, especially amid concerns about slowing global growth.
Despite the sharp downward trend, low bond yields and long-term hedging demand related to financial uncertainty remain structural support factors for prices, once the forced selling pressures subside.