Silver futures experienced significant downward pressure over two consecutive trading sessions, declining approximately 3.4% as stronger-than-expected economic data strengthened the U.S. dollar, according to CME Group analysis. The weakness in precious metals was driven by robust macroeconomic indicators that reinforced expectations for continued restrictive monetary policy. The S&P Global flash composite PMI reached its highest reading since July 2021, while the Atlanta Fed's GDPNow estimate surged to 5.1%, both factors contributing to dollar strength and placing downward pressure on silver prices, which are denominated in U.S. currency.
However, the precious metals complex was not entirely without support. The extension of a trade truce between Washington and Beijing through January 2027 provided a floor for silver prices. By reducing the near-term risk of manufacturing disruptions and tariffs, the trade agreement helped sustain the outlook for industrial demand for silver, offsetting some of the broader macroeconomic headwinds impacting the commodities complex.
The dual-sided pressure on silver reflects the conflicting dynamics in industrial metals markets, where strong economic data typically strengthens the dollar and weighs on precious metals, while trade tensions or recession fears tend to support demand for industrial materials. The near-term extension of the U.S.-China trade truce suggests market participants are pricing in continued industrial demand despite the macroeconomic headwinds from monetary policy expectations.
Source: cmegroup.com