Silver prices have fallen sharply due to growing concern about global economic activity. Industrial consumption, which accounts for more than half of the demand for silver, has plummeted. One of the main reasons why silver is so affected right now is because it is considered both an industrial metal and a precious metal, so it faces the disadvantages of both. This has prompted renewed interest in safe haven assets, such as precious metals, causing silver to skyrocket as well.
The main long-term catalyst for silver is progress towards ecological transition and the growing adoption of electric vehicles, with the widespread use of metal in the photovoltaic sector as a key component of solar panels. Reuter
(s) - Gold fell more than 1% to its lowest level in a week on Monday amid sharp declines in precious metals due to the strength of the dollar, with concerns about further rate hikes by the US. UU. Gold and silver prices are also lower on demand concerns following weak economic data from China, Jim Wyckoff, senior analyst at Kitco Metals, said in a note.
Therefore, as a precious metal, it is exposed to the impact of higher interest rates, as a hedge against inflation, in addition to bearing part of the brunt of gold. More than a year after Reddit-driven short silver contraction, dubbed “the world's largest short contraction,” which pushed silver prices to near 8-year highs, the metal is now trading close to a one-month low. Gold fell sharply on Monday, as the US dollar rose on the Federal Reserve's stakes of steep interest rate hikes, eroding investor attractiveness for the precious metal. This persistent tightening of monetary policy has put precious metals under significant pressure in recent weeks.