Domestic silver prices
As of 9:05 am on May 18, the price of 999 silver (1 tael) of DOJI Jewelry Group Joint Stock Company was listed at the threshold of 2.788 - 2.890 million VND/tael (buying - selling); down 41,000 VND/tael on the buying side and down 26,000 VND/tael on the selling side compared to yesterday morning.
At the same time, the price of 999 silver bars (1 tael) at Phu Quy Jewelry Group was listed at the threshold of 2.814 - 2.901 million VND/tael (buying - selling); down 15,000 VND/tael in both directions compared to yesterday morning.
The price of 999 silver ingots (1kg) at Phu Quy Jewelry Group is listed at 75.039 - 77.359 million VND/kg (buying - selling); down 400,000 VND/kg in both directions compared to yesterday morning.
World silver price
On the world market, as of 9:15 am on May 18 (Vietnam time), the world silver price was listed at 74.96 USD/ounce; down 0.97 USD compared to yesterday morning.
Causes and forecasts
Silver prices have just experienced a week of strong fluctuations when they fell deeply after US inflation data increased higher than expected. The upward momentum of US Treasury bond yields along with the strengthening of the USD has weakened expectations of the possibility of the US Federal Reserve (Fed) early interest rate cuts.
In the past week, silver prices once rose to a two-month high, reaching 89.24 USD/ounce, before plunging to 75.85 USD/ounce at the end of the week. Meanwhile, gold prices also fell but the adjustment was significantly lighter. According to currency and precious metals expert Muhammad Umair at FX Empire, this shows that silver is more sensitive to interest rate fluctuations because in addition to its role as a safe haven asset, this metal also depends heavily on industrial demand.
The sharp drop in silver mainly reflects the market's short-term reaction to the prospect of the Fed continuing to maintain high interest rates longer than expected. However, this development has not changed the positive trend of silver in the long term," Muhammad Umair said.
Muhammad Umair said that US inflation data at 6% reinforces the role of silver as a risk hedging asset against currency depreciation. Prolonged inflationary pressure shows that the purchasing power of the USD continues to weaken, thereby supporting future demand for holdings of precious metals.
The US Federal Reserve (Fed) is currently facing a difficult problem as inflation remains high but the economy shows signs of slowing down.
According to Muhammad Umair, the tight monetary policy environment is assessed to continue to cause the silver market to fluctuate strongly in the short term, especially as industrial demand may weaken as economic growth slows down. However, if inflation remains high, silver is likely still chosen by investors as a hedge against monetary risks and financial instability.
However, the medium-term outlook for silver is still quite positive. The recent sharp decline is seen as a temporary reaction to interest rate fluctuations rather than a sign of trend reversal" - Muhammad Umair analyzed.
In the near future, a strong USD and high bond yields may continue to put pressure on silver prices. However, Muhammad Umair believes that factors such as prolonged inflation, energy tensions and policy instability are still the foundation for supporting this precious metal.
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