Why Did the Silver Price Fall So Sharply Last Week?

Why Did the Silver Price Fall So Sharply Last Week?

Silver declined noticeably last week – not due to a single "trigger," but because of a combination of interest rate, dollar, and economic signals that often act as an amplifier for precious metals.

1) The key driver: US interest rates up, dollar stronger – this weighs on silver

Precious metals do not yield ongoing interest. When yields on the US bond market rise and the US dollar simultaneously strengthens, holding silver becomes less attractive for many market participants. This exact environment intensified significantly towards the end of the week after strong US labor market data refueled the "higher for longer" interest rate expectation.

As a result, there was a broad pullback in gold and silver. According to the Wall Street Journal, Comex silver fell in the week ending Friday, June 5, 2026, by around 8.82% to 68.943 US dollars per ounce – one of the sharpest weekly declines since March 2026.

2) Profit-taking after the strong run: "too far, too fast"

Silver had performed strongly in the preceding months and remained significantly up year-on-year despite the pullback. In such phases, "hawkish" signals (high interest rates, strong dollar) are enough to trigger automated sales, profit-taking, and a chain reaction – especially in a volatile market like silver. Market reports and price series, which clearly mark the decline as of June 5, also show that silver can correct particularly quickly after strong movements.

3) Silver is also an industrial metal – and signals from China matter too

Unlike gold, silver has a stronger industrial character. When the economic outlook falters, silver is often "punished" twice: as a precious metal via interest rates and as an industrial metal via growth concerns. A fresh signal came from China: The official Purchasing Managers' Index (PMI) for the manufacturing sector stood at 50.0 in May, right on the threshold between growth and contraction (−0.3 points compared to the previous month). This is not a crash signal – but in a nervous market phase, "less momentum" is enough to cause additional caution.

4) The price drop in figures (week ending June 5, 2026)

To provide context, it helps to look at specific benchmarks for the week:

Important: Spot, CFD, and futures quotes may differ slightly (timing, trading venue, contract), but the direction and momentum of the movement were clear.

What does this mean for investors?

A weekly decline of this magnitude seems dramatic – but it is not unusual for silver when interest rate and dollar impulses shift. What matters is less the individual candle on the chart and more the mechanism behind it: rising yields and a stronger dollar have historically often been headwinds for precious metals, and for silver, the industrial factor is an additional element.

For long-term oriented buyers, this is usually more of an indication of the nature of the market (volatile, fast), not automatically a "good" or "bad" signal. Therefore, anyone dealing with silver should always keep an eye on interest rate and dollar data as well as major economic indicators – especially around important US labor market figures.

Maintain a long-term perspective

Yours, Helge Peter Ippensen