Sharp Decline in Silver Prices: Two-Week Value Loss Reaches 11.2 Percent

Silver prices faced deepening selling pressure in the second half of October. Having stood at $60.74 on October 9, ounce silver dropped to $53.92 on Friday, October 23, losing 11.2 percent in value over two weeks. This decline in international markets also affected gram silver prices domestically.

Silver prices experienced a sharp drop in global markets during the second half of October. Ounce silver, which was $60.74 on October 9, fell to $53.92 on Friday, October 23. While a loss of $6.82 per ounce was recorded, prices remained approximately 55 percent below the peak seen during the year. The 6-month loss of ounce silver was recorded at 18.8 percent. Standing at $56.98 on October 16, ounce silver lost approximately 5.4 percent in value the following week, and the sales carried over into the second week. Silver falling below $54 after exceeding $121 during the year erased a significant portion of the gains from the rally period.

The decline in international markets also pulled gram silver prices down domestically. Closing the week at 86.14 liras on October 23, gram silver lost about 5 percent in value in a week. Although the rise in the dollar/TL exchange rate during the same period partially limited the reflection of the drop in the ounce price onto gram silver, the increase in the exchange rate was not enough to prevent the losses. The 6-month loss of gram silver stood at 16.3 percent.

Expectations that the high interest rate environment will continue are influencing the sales in precious metals. While the pressure of energy prices on inflation weakens expectations for monetary easing, markets focused on the Fed's October 27-28 meeting. The messages to be given following the meeting, where interest rates are expected to be kept on hold, are being monitored regarding the course of the selling pressure on silver.