Key Takeaways:
Silver is at risk of a breakdown on Thursday as surging US interest rates erode support levels that have held for several sessions, with traders bracing for further volatility in the precious metals complex.
"The support has been chopped away for several days, and we expect more volatility in this already choppy market," said Omar Tariq, a commodities strategist covering metals markets.
Rising US interest rates increase the opportunity cost of holding non-yielding assets such as silver, putting pressure on the white metal. The bearish setup for silver comes as the broader precious metals sector faces headwinds from a stronger dollar and higher real yields, which typically weigh on gold and silver prices alike.
A breakdown in silver could have contagion effects across the precious metals complex, with gold also vulnerable to further selling if the rate environment continues to tighten. The move signals broader risk aversion in commodity markets as traders recalibrate positions in response to shifting monetary policy expectations.
The next catalyst for silver will be US economic data releases that could influence the Federal Reserve's rate path. Any further upside surprises in inflation or employment figures would likely accelerate the sell-off in precious metals, traders said.
This article is for informational purposes only and does not constitute investment advice.
