Silver Prices Plummet to Lowest Levels Since March Amid Inflation Concerns

Silver prices hit their lowest levels since March, causing concern among investors. The metal's spot price dropped 5% to $64.7 an ounce, while gold fell nearly 2% to $4,247 per ounce. According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, sellers remain in control of the market, with traders focusing on downside support levels.

Hansen noted that gold's failed rally suggests that sellers are dominating the market, and that investors are waiting for greater clarity on inflation, energy prices, and the Federal Reserve's policy path. He also pointed out that the gold-to-silver ratio has reached its highest level in two months, with silver underperforming gold.

Commerzbank warned that higher inflation data for May could increase selling pressure on gold, potentially pushing the price further down. Economists expect May inflation to remain elevated due to higher energy costs. While markets are pricing in a possible rate hike before the end of the year, the Federal Reserve is widely expected to leave rates unchanged this month.

Despite the sharp decline, retail sentiment surrounding SPDR Gold Shares ETF (GLD) remained 'bullish', while sentiment for iShares Silver Trust (SLV) trended in the 'bearish' territory. GLD has declined more than 3% so far this year, while SLV has fallen more than 10%.