Silver fell to multi-week lows on Tuesday as markets continued to anticipate a more restrictive global monetary policy environment.
More hawkish expectations from major central banks, including the Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, have reinforced the view that interest rates could rise this year.
The likelihood of additional tightening could leave sovereign bond yields at elevated levels, reducing silver’s appeal as a non-yielding asset.
Attention now turns to the upcoming US inflation data release, which could prove pivotal in shaping expectations for the monetary policy outlook and determining whether yields continue their upward trajectory.
Despite the current weakness, silver continues to benefit from long-term structural demand linked to electrification, renewable energy, AI infrastructure, electronics, and automotive manufacturing. At the same time, the silver market is still expected to remain in deficit, which could help limit the downside risks to some extent.
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