Silver price fluctuation 24.5: Under pressure from the USD and Fed policy

Domestic silver prices

Closing the week's trading session, the price of 999 silver (1 tael) of DOJI Jewelry Group Joint Stock Company was listed at the threshold of 2.855 - 2.958 million VND/tael (buying - selling).

Compared to the closing session of two weeks ago (May 10), the price of 999 silver (1 tael) of DOJI Gold and Gems Group Joint Stock Company decreased by 182,000 VND/tael on the buying side and decreased by 173,000 VND/tael on the selling side.

At the same time, the price of 999 silver bars (1 tael) at Phu Quy Jewelry Group was listed at 2,860 - 2.948 million VND/tael (buying - selling).

Compared to the closing session of two weeks ago (May 10), the price of 999 silver bars (1 tael) at Phu Quy Jewelry Group decreased by 177,000 VND/tael on the buying side and decreased by 183,000 VND/tael on the selling side.

The price of 999 silver ingots (1kg) at Phu Quy Jewelry Group is listed at 76.266 - 78.613 million VND/kg (buying - selling).

Compared to the closing session of two weeks ago (May 10), the price of 999 silver ingots (1kg) at Phu Quy Jewelry Group decreased by 4.72 million VND/kg on the buying side and decreased by 4.88 million VND/kg on the selling side.

World silver price

Closing the weekly trading session, world silver prices were listed at 75.49 USD/ounce.

Causes and forecasts

The silver market is under great pressure as expectations for the US Federal Reserve (Fed) to cut interest rates continue to be pushed back.

At the end of Friday's trading session, spot silver price closed at 75.49 USD/ounce, down 1.15 USD, equivalent to 1.5%. For the whole week, this precious metal lost 0.48 USD, equivalent to a decrease of 0.63%.

According to precious metals analyst James Hyerczyk of FX Empire, the main reason for the weakening of silver is that the Fed is not ready to ease monetary policy. Recent statements from Fed officials show that inflation has not been controlled as expected, causing the time to cut interest rates to be postponed to the second half of the year or even later.

This puts pressure on the entire group of precious metals, especially silver. When interest rates remain high, cash flow tends to shift to profitable assets such as bonds, instead of assets that do not generate yields such as gold and silver.

Silver is not profitable, so when bond yields and the USD remain high, the precious metal is often at a disadvantage in competing for investment flows" - said an expert from FX Empire.

Although the yield of 10-year US government bonds fell in the last session of the week, this development was still not enough to support the silver market. According to analysts, investors are focusing more on the long-term monetary policy outlook of the Fed instead of short-term fluctuations in yields.

The decline of gold prices along with the strengthening of the USD also dragged silver down more sharply due to the high volatility and thinner liquidity of this market.

However, in the long term, silver still has structural supporting factors. Demand from the solar, electronics and industrial production industries continues to increase, especially in China - the world's largest metal production and consumption center.

However, Mr. Hyerczyk believes that these supporting factors are currently not strong enough to compensate for selling pressure stemming from the Fed's tough monetary policy.

The long-term support story of silver is still intact, but the current time is not favorable," he said.

Technically, James Hyerczyk said that investors are closely monitoring the threshold of 75.98 USD/ounce. Silver prices have fluctuated around this zone for 5 consecutive sessions and new signals from the Fed may decide the next trend of the market.