15.05.202608:10:59UTC+00Silver Plunges as Rate Hike Fears Bite

Silver tumbled 6% to $79 an ounce on Friday, extending its decline for a second straight session, as mounting concerns over rising US inflation and the prospect of further interest rate hikes pressured the market. Recent data showed that US producer, import, and export prices in April rose at their fastest pace since 2022, while annual inflation climbed to its highest level since 2023, driven in part by the prolonged Iran war and the continued closure of the Strait of Hormuz. As a result, markets have now fully priced out the possibility of a Federal Reserve rate cut this year, with some traders even betting on a potential rate increase by December. Sentiment was further weighed down after UBS strategists sharply reduced their forecast for full-year investment demand from over 400 million ounces to 300 million ounces, citing weaker industrial consumption and rising mine output. The bank also now expects the silver market’s supply deficit to narrow dramatically to about 60–70 million ounces, down from a previous projection of 300 million ounces.