Why is silver price down today?

Silver price has plummeted more than 4.6% on Monday. The precious metal has touched $61.32 per ounce. The higher oil prices have stoked inflation fears and led to the downfall of bullion prices. It has also bolstered the case for elevated interest rates. The gold has also reached its lowest in over seven weeks.

Today's silver price

As of 1031 GMT, spot silver fell 4.6% to $61.32 per ounce. The platinum has lost 2.4% to reach $1,735.95 and palladium declined by 3.4% to touch $1,224.39.


Meanwhile, the spot gold was also down by 3.1% to $4,155.67 per ounce. The gold has hit its lowest since August 5. US gold futures for December delivery has also dropped by 3.1% to $4,188.10. The dollar has held firm till now. It has made greenback-priced bullion more expensive for holders of other currencies. US Treasury yields have also extended gains.

Why is silver price down today?

The silver price is falling due to the higher oil prices and the increased chance of more rate hikes in the US. Giovanni Staunovo, analyst, UBS, said, "Higher oil prices and the increased probability of further US rate hikes being priced in by market participants are the main drivers behind gold's recent weakness. This backdrop could keep US real yields and the US dollar elevated, raising the opportunity cost of holding non-yielding gold and contributing to further near-term volatility in the precious metal."

In October, traders expect a 70.3% chance of a Fed rate hike, CME's FedWatch Tool showed. Brent crude oil has also rebounded. US President Donald Trump has also rejected Iran peace proposal to resolve the conflict and reopen the Strait of Hormuz. The tensions have risen in the Middle East. The energy costs have also increased, which will drive inflation higher.

Earlier this month, the US central bank has also increased rates by a quarter percentage point. It also shows that additional hikes are most likely. Beth Hammack, chief, Cleveland Fed, said on Friday, that consistent high inflation risks can make the American public accept hiked prices as the norm. The central bank cannot let it happen. This week, a series of US economic releases are scheduled. These include ADP employment report, job openings, Personal Consumption Expenditures readings and nonfarm payrolls.