Silver experienced its most significant drop recently, pressured by Federal Reserve Chair Jerome Powell’s hawkish comments and a strengthened U.S. dollar, which has led to an improved risk appetite among investors. Jerome Powell indicated that interest rates could rise if inflation remains above the Fed’s target, causing a surge in the dollar’s value and putting downward pressure on silver prices. The market is now closely watching for upcoming data on consumer price inflation and retail sales.

Although there was a brief moment of dollar weakness due to some dovish interpretations of Powell’s earlier remarks this month, the overall market sentiment has remained cautious. Traders of Fed funds futures are now estimating a 22% likelihood of an additional rate hike by January, as global inflation concerns persist and the possibility of further monetary tightening looms.

Adding to the bearish outlook for silver, the yield on the 10-year U.S. Treasury note has climbed, reflecting investor worries about future inflation and monetary policy directions. A recent lackluster demand at a 30-year bond auction also hints at long-term economic outlook concerns. The near-term forecast for silver seems to be pointing downward unless there is an escalation in geopolitical tensions or disappointing economic reports from the U.S.