FX.co ★ Silver Heads for Third Weekly Decline

Silver hovered around $76 per ounce on Friday, stabilizing after Thursday’s sharp drop yet remaining on track for a third consecutive weekly loss as volatility returned to markets. Thursday’s selloff had no obvious single trigger, but concurrent declines in equities and cryptocurrencies suggest broad-based forced liquidation across asset classes, likely exacerbated by systematic and algorithmic trading.

Attention has now shifted to the latest US inflation data, which will be key in shaping expectations for Federal Reserve policy. Stronger-than-expected US employment figures earlier this week have diminished the odds of an imminent rate cut, with futures markets now anticipating the first reduction in July instead of June. Even so, the Fed is still expected to deliver roughly two 25-basis-point cuts by the end of the year.

Silver and other precious metals may also find support from growing concerns over currency debasement, as some investors shift capital out of fiat currencies and sovereign bonds and into hard assets.