Devastating! Silver Prices Plummet Nearly 10% in a Week: What is Happening?

Global silver prices have plummeted following a series of negative developments haunting the precious metal throughout the week. According to Refinitiv data, international spot silver prices were recorded at US$67.81 per troy ounce on Friday (5/6/2026), representing an 8.2% drop in a single day.

This decline of over 8% marks the worst daily performance since 14 May 2026, when prices fell by 9.02%. This downturn has pushed silver prices to their lowest levels since 20 March 2026. Over the course of the week, silver prices collapsed by 9.89%, the lowest point since the third week of March 2026.

The sharp decline in silver prices is attributed to various factors, including a surge in the US dollar, rising yields, US labour market data, and expectations of interest rate hikes by the US Federal Reserve this year. The US dollar index breached the 100.07 level, its highest since late March 2026. Meanwhile, the 10-year US Treasury yield rose above 4.54%, and the 30-year yield surpassed 5%.

Because silver is priced in US dollars, the strengthening dollar reduces demand. Furthermore, as silver offers no yield, the rise in US government bond yields has made the metal less attractive to investors. US employment data, which was stronger than anticipated, has also reinforced expectations that the Fed will maintain high interest rates for a longer period. Inflation concerns triggered by the war in the Middle East have also weighed on market sentiment.

Data from the US Bureau of Labor Statistics showed that non-farm payrolls increased by 172,000 jobs in May, after being revised upwards to 179,000 in April. This figure was significantly higher than the Reuters poll projection, which estimated an addition of only 85,000 jobs.

“We are seeing payroll data that is far stronger than market expectations,” said Bart Melek, Head of Global Commodity Strategy at TD Securities, as quoted by Reuters. “Amidst the ongoing conflict with Iran, very high energy prices, and strong inflationary pressures, it is highly unlikely that the Fed intends to lower interest rates. The implication for silver is that the cost of carry is becoming increasingly expensive.”

Currently, the market estimates a 72% probability that the Fed will raise interest rates in December, according to the CME Group’s FedWatch Tool. Prior to the release of the labour data, this probability was only around 50%.

Silver has faced significant pressure due to the conflict between Iran, the United States, and Israel, as fears grow regarding central bank interest rate hikes globally. Although silver is often viewed as a hedge against inflation and an alternative to gold, high interest rates generally act as a negative sentiment for precious metals because they increase the attractiveness of interest-bearing instruments. Additionally, prolonged conflict puts pressure on global economic growth and industrial strength, which ultimately causes silver prices to collapse, given that silver serves as both a financial hedge and an essential industrial raw material.