FX.co ★ Silver Holds Decline on Inflation Worries

Silver fell below $77 an ounce on Monday after slumping more than 13% over the previous two sessions. The decline came as mounting evidence that the Middle East–driven energy price shock is feeding into broader inflation trends strengthened expectations for tighter central bank policy. Prices were further pressured by a stronger US dollar and rising Treasury yields, after hotter-than-expected US inflation data led investors to rule out any Federal Reserve rate cuts this year and increased speculation that policymakers could still deliver a rate hike before year-end. Sentiment was also hit by UBS strategists sharply cutting their full-year silver investment demand forecast to 300 million ounces from more than 400 million ounces, citing weaker industrial demand and higher mine supply. The bank now expects the global silver market deficit to narrow markedly to about 60–70 million ounces, down from an earlier estimate of roughly 300 million ounces.