Silver prices fell back on Thursday, in line with falling gold prices, and reversing the previous day’s sharp gains.
Prices fell as low as $24.67 an ounce on Thursday, down from around $25.77 earlier in the session.
Silver moved lower in the wake of gold prices, which fell back Thursday from all-time highs of around $2,223 an ounce on Wednesday.
The recent strength in the precious metals complex has come from shifting expectations of interest rate cuts by central banks. Data from interest rate traders now suggests a probability of more than 70% that the US Fed will start to cut rates at its June 12 meeting, and the bank has signalled it expects to make three cuts this year in total.
Moreover, the Swiss National Bank on Thursday surprised the markets by cutting interest rates by 25 basis points — the first major central bank to start easing monetary policy in recent years.
With the recent surge, silver prices have shown signs of closing in on the $26.00 an ounce mark, which has proved a resistance level over the last two years. This may have triggered a more bearish attitude in the markets and tempered expectations that the rally could continue.
Looking ahead, Friday will see the release of UK CBI industrial trends orders for March. The markets will also be watching out for monthly US durable goods orders on Tuesday next week, which include consumer electronics, jewellery and medical equipment – all of which are sources of demand for silver.
Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.
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