Silver Struggles Amid Dollar Strength and Investor Caution
Silver prices remain under pressure, caught between weak US labor data and a strengthening dollar. The front-month COMEX contract settled at $60.71 per ounce on Monday, hovering near two-month lows, while spot pricing edged up 1.1% to close at $61.40, still below its 50-day moving average of $65.50.
Investor caution is evident in positioning data, with large futures players keeping their exposure modest. European retail and institutional investors have also been cautious, as silver ETCs saw net outflows of EUR 1.6 billion across the first eight months of the year. Silver's dual identity as both a precious and an industrial metal has weighed on demand through securities products.
Mixed macroeconomic signals add to the uncertainty. While US nonfarm payrolls rose by just 29,000 in September, elevated Treasury yields and a firm dollar make holding non-yielding metals more expensive. Inflation jitters have cooled hopes for a quick pivot on rates, with the Federal Reserve's last meeting minutes due Wednesday, October 7, expected to shed more light on the policy path.
The dollar's strength, driven by political and fiscal tensions in the eurozone, has raised the cost of commodities for buyers outside the dollar bloc. Year-to-date, silver is down 14%. Geopolitical risks in the Middle East have failed to lift the metal, overshadowed by currency effects.
Technically, the setup remains fragile, with key support just below the $61-per-ounce threshold. Physical demand, however, holds steady, with significant delivery notices of 6,168 contracts for the September contract, equivalent to 30.84 million ounces.