The price of silver sold off strongly last week and may see further losses as global inflation cools.
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The price of silver slumped through the $24.50 level and could retrace further toward the moving average under $23 initially.
Weaker data from the Chinese industrial sector have hit silver. According to the statistics agency, industrial production was higher by 5.6% yearly in April, but analysts expected a more substantial 10.9%. Silver is driven by economic performance in major countries because of its industrial use in products like solar panels.
The precious metal’s price has been under pressure from a rising US dollar. The greenback found support near the 100 level last week and could push higher. A deal on the US debt ceiling could drive further dollar gains.
Another factor in silver’s recent weakness has been a surge in the gold/silver ratio, which has jumped to the highest level since March 30. That move happened despite gold dropping from $2,080 to $1,985.
The recent high at $2,075 marked a double top from the 2022 high, and gold could see a further retreat toward the $1,870 level. Gold prices have been boosted over the last year by robust central bank buying. Silver is bought more by retail investors and rushed to catch up to the gains in gold as it tested the 2022 highs.