Silver prices plunged below US$80 and inflation signals suppressed safe-haven markets

On May 16, silver experienced another week of extreme volatility, and the price finally fell sharply below $80 an ounce, bringing another round of sharp volatility to one of the most volatile markets of the year. In the week ending Wednesday, silver prices surged 11.3 percent at one point in the week, driven by investor enthusiasm for artificial intelligence-related stocks and industrial metals used in data center power systems, wiring and cooling. On Monday, speculation about fuel supplies from major mineral-producing Peru also pushed prices higher. Silver prices fell later on more signs that the war in Iran was fueling inflation, leading investors to demand higher yields on government bonds. Higher borrowing costs pose a negative impact on silver, which normally pays no interest. James, chief precious metals analyst at HSBC Holdings, said: "We still believe that silver is fundamentally overvalued and that demand for silver in the jewelry and industrial sectors will continue to weaken in the face of high prices."