Silver prices plummeted after a series of hot increases

Illustration photo.

The global raw material market continued to fluctuate strongly in the trading session on October 21 when overwhelming selling pressure pulled the MXV-Index down 0.8% to 2,255 points. According to the Vietnam Commodity Exchange (MXV), the metal group was the focus of attention of domestic and international investors as it led the weakening trend of the entire market.

Silver prices fell more than 7% - the sharpest decline since early October, falling below the psychological threshold of 50 USD/ounce due to massive profit-taking activities, in the context of a stronger USD and a weakening outlook for industrial consumption. The December silver futures contract ended the session at 47.7 USD/ounce.

Analysts say this correction is inevitable after a long streak of growth, especially when new data shows that industrial demand is slowing. In China - a country that accounts for about 40% of global industrial silver demand, GDP growth in the third quarter was only 4.8%, down from 5.2% in the previous quarter. Although industrial output in September increased 6.5% compared to the same period last year, the economy is assessed to be increasingly dependent on exports, threatening silver demand in the electronics, solar panels and green energy sectors.

At the same time, the USD index (DXY) increased by 0.35% to 98.93 points - the third consecutive increase, making the precious metal less attractive to investors holding other currencies.

Despite the sharp short-term correction, silver’s long-term outlook remains positive thanks to a solid supply-demand foundation. The market is forecast to continue to record a deficit for the fifth consecutive year as demand from the renewable energy and electric vehicle sectors remains strong.

In addition, geopolitical risks and the possibility of the US Federal Reserve easing monetary policy are expected to reactivate safe-haven buying. Investors are currently watching the US Consumer Price Index (CPI) data, scheduled to be released on the evening of October 24 (Vietnam time), which is considered a key factor in orienting interest rate expectations in the context of the US government being temporarily shut down.

In Vietnam, the price of 999 silver on the morning of October 22 also decreased by more than 4%, falling from the range of over 1.7 million VND/tael maintained for the past half month. Currently, the silver price in Hanoi fluctuates between 1.626 - 1.656 million VND/tael (buy - sell), and in Ho Chi Minh City it is 1.628 - 1.662 million VND/tael. Due to almost complete dependence on imported sources, domestic silver prices often fluctuate in parallel with the world market.

Source: https://vtv.vn/gia-bac-lao-doc-manh-sau-chuoi-tang-nong-100251022135300104.htm