Sharp drop in silver prices over three days due to inflation and interest rate pressure
As US inflation exceeded expectations, silver prices lost 8.5 percent in value over three days, while international banks announced differing price forecasts.
Due to US inflation exceeding expectations and potential Federal Reserve rate hikes, silver prices lost 8.5 percent in value over three consecutive trading sessions. Amid this period where critical support levels were tested, international banks' price forecasts for the future of silver varied.
Inflation and Bond Pressure
Annual inflation in the US rising to 3.7 percent and expectations that the Fed might continue interest rate hikes increased selling pressure on precious metals.
US bond yields hovering above 5.2 percent and the dollar index staying above the 102 level were among the other main elements negatively affecting silver prices.
Technical Levels and Support
While 55 US Dollars, coinciding with the lows of the year, stands as a critical support level for silver, it is noted that dropping below this level could deepen the selling pressure.
In possible recoveries, 58 US Dollars stands out as the initial resistance, while maintaining a position above 62 US Dollars could weaken the downward trend.
Gold-Silver Ratio Changing
Silver underperformed compared to gold, causing investors to turn toward gold, and the gold-silver ratio, which was 64 at the end of September, approached 73.
Even demand stemming from its widespread use in industry was not enough to stop the decline in silver prices.
International Banks' Expectations
Citigroup maintains its short-term target of 75 US Dollars, while forecasting 90 US Dollars in the next 6-12 months and 110 US Dollars in the long term.
Bank of America evaluates that if the rise in gold continues, silver could exceed 100 US Dollars, though sustaining stability at these levels might be difficult.
Forecasts from Various Institutions
UBS sets a target of 70 US Dollars for December 2026, 75 US Dollars for March-June 2027, and 80 US Dollars for September 2027.
JPMorgan estimates that the average price throughout 2026 will be 70.60 US Dollars, while Commerzbank lowered its end-2026 target to 67 US Dollars.