Silver prices extended losses for a third consecutive session Thursday, trading around $56.90 per troy ounce during Asian market hours after falling toward $56.50. The precious metal faces mounting pressure as traders increasingly price in higher odds of Federal Reserve interest rate hikes amid shifting monetary policy expectations.
The selloff in silver reflects broader precious metals weakness as tighter Fed policy typically strengthens the dollar and raises opportunity costs for holding non-yielding assets. Silver’s industrial demand component adds vulnerability compared to gold, making it particularly sensitive to economic policy shifts that could impact manufacturing activity.
Traders and brokers should monitor upcoming Fed communications and economic data releases closely, as any hawkish signals could accelerate silver’s decline. The metal’s failure to hold above the $57 level suggests weakening technical support, with potential for further downside if rate hike expectations continue building.
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FXnCO Insight
** Position for continued precious metals pressure and watch $56 as the next critical support level, while dollar strength plays may offer better risk-reward in the current Fed outlook environment.
Source: FXStreet