Precious Metals Plunge as Natural Gas Soars

The precious metals market saw significant selling pressure last week, with silver and platinum experiencing sharp declines. Silver prices fell by over 3% due to a rise in the US dollar and US bond yields, making it less attractive compared to other yield-producing assets. The US economy's strong expansion, as indicated by the S&P Global Flash Composite PMI rising to 58.4, increased expectations that the Federal Reserve will maintain high interest rates, further pushing up the US dollar and US bond yields.

The silver market was also impacted by a lack of available supply, with only about 136 million ounces considered available for trading and leasing in London warehouses at the end of September 2025. On the demand side, the solar cell manufacturing industry continues to push for reductions in silver usage per unit and research into partially replacing silver with other materials.

Natural gas prices, on the other hand, rose nearly 6% last week due to a tightening supply-demand balance. The amount of gas added to storage was significantly lower than the same period last year, and current inventories are only about 2.9% above the five-year average.