• Silver (SLV) plunges more than 5% to $73.57/oz, extending a sharp reversal from decade-high territory.
  • A stronger US dollar and reduced expectations for Federal Reserve easing are driving the selloff, with profit-taking amplifying losses.
  • The decline reflects broader weakness in precious metals, with gold (GLD) and platinum (PTM) also under pressure.

Silver Selloff Intensifies

Spot silver extended its decline on Thursday, falling over 5% to $73.57 per ounce, as a potent mix of a stronger US dollar, diminished Fed rate-cut expectations, and profit-taking after a prolonged rally weighed heavily on the white metal. The move marks a significant correction from recent decade highs, with investors unwinding long positions amid heightened macro uncertainty.

“The selloff is being driven by a shift in rate expectations and a corresponding rally in the dollar,” said a precious metals trader at a European bank. “Silver is particularly sensitive to these moves because of its dual role as an industrial metal and a monetary asset.”

The decline was part of a broader rout across precious metals, with spot gold also slipping and platinum posting similar losses. Market participants cited a hawkish tilt in recent Fed communications as a key catalyst, reinforcing expectations that interest rates will remain higher for longer.

Strong Dollar Weighs

The US dollar index rose to a fresh multi-month high on Thursday, pressuring commodities priced in the greenback. Higher Treasury yields further dampened the appeal of non-yielding assets like silver, as the opportunity cost of holding them increased.

“Silver had a tremendous run over the past year, but the macro backdrop is turning against it,” said an analyst at a London-based research firm. “If the dollar continues to strengthen, we could see further downside in the near term.”

Profit-taking also played a role, with traders noting that speculative positions had become stretched after silver’s rally to decade highs. The selloff triggered stop-loss orders, accelerating the decline.

Implications for Miners and Industrial Users

The sharp drop in silver prices poses challenges for mining companies, many of which have benefited from elevated prices. Producers with high all-in sustaining costs could see margins squeezed if prices remain depressed. Conversely, industrial users such as electronics and solar panel manufacturers may gain from lower input costs.

Silver’s industrial demand, particularly from photovoltaic applications, has been a key driver of the metal’s recent strength. However, the current selloff highlights the dominance of macro factors—namely US monetary policy and currency moves—in setting near-term prices.

Outlook Remains Volatile

Traders expect continued volatility in the coming sessions, with silver’s direction hinging on upcoming US economic data and Fed speeches. A weaker-than-expected jobs report, for instance, could revive rate-cut speculation and spark a rebound. On the other hand, sustained dollar strength could pressure silver toward the $70/oz level.

“We’re in a wait-and-see mode,” the trader added. “The fundamentals are still supportive over the long term, but the short-term picture is dominated by macro and positioning.”

Correction: An earlier version of this article misstated the extent of the decline. Silver fell over 5%, not 6%, to $73.57/oz.