Silver Plunges After Warsh's Hawkish Remarks at Jackson Hole

Kevin Warsh's hawkish tone at the Jackson Hole Economic Symposium sent silver prices plummeting on Friday, August 28. The metal had reached a two-month high of $71.12 earlier in the day, built on investor positioning ahead of the Fed chair's address.

However, after Warsh spoke, silver lost $4.37 an ounce, closing at $66.76 and down 3.60% on the session. This move was attributed to traders unwinding precious metals positions in response to a stronger dollar and higher Treasury yields.

The repricing of silver followed a clear mechanical logic: when the Fed signals that rates may rise, the calculus shifts against the metal. As Warsh's remarks were interpreted as leaving the door open for a September rate hike, options traders priced in a 57% chance of a 25-basis-point increase at the FOMC meeting.

The structural deficit that has driven silver higher over the past two years remains unchanged. Total mine output has been flat since 2010, while demand from industrial applications continues to grow.