1. Home
  2. Live Market Analysis
  3. Silver declines again
Silver declines again

Silver declines by 1.40% throughout the day, with the decline accelerating as we approach the open of the US trading session. The price movement has almost fully lost yesterday’s price gains. Traders seem to be treading cautiously as we approach the FOMC report this evening. The market is looking towards the US Dollar, interest rates, and other factors to determine how the price is likely to develop.

How the US Dollar and interest rates are influencing Silver

Over the past 2 weeks, silver has been supported by an increase in demand and a struggling US Dollar. The price of silver has increased by almost 7.5%, however, traders should note that this is less significant compared to the 20% decline which formed on the 19th of April. Even with today’s decline, the price movement is still within a traditional upward trend forming higher highs and lows. Though traders should be cautious if the decline strengthens, in which case the scenario changes.


Silver has come under pressure due to its inverse correlation with the US Dollar. As the US Dollar has gained and interest rates have strongly increased, silver has struggled. This is mainly due to its correlation and the fact that investors are able to benefit from other strong performing safe-haven assets such as Dollar Accounts and Treasury Bills.

The market will be looking at the performance of the US Dollar when trading silver. The asset may struggle to maintain its value if the US Dollar continues to climb. However, the struggling stock market which has significantly declined may prompt investors to turn to other assets such as silver.

Demand for Silver

The demand for gold and silver is gradually increasing according to experts, even if this cannot be seen in today’s price movement. Last week, the head of the European Commission announced large-scale changes in the field of solar energy production. In the Eurozone, it is planned to increase production by 10% through the use of renewed batteries, and silver is a key element in the creation of panels, which will lead to an increase in demand for the metal. However, it cannot be certain when the need will materialize or whether we will also see the level of supply increase as well. According to analysts, in 2022, demand for precious metals may increase by 12%.

According to data from the CFTC (Commodity Futures Trading Commission), the number of speculative trades in silver decreased to 16,000 in September 2021 and has since increased to 46,000 contracts. So we can see here that demand has increased in terms of futures. The current positive dynamics can be observed from the local report of swap dealers, who began to reduce short positions in metal actively, and over the past week, their number has decreased by 3743 contracts, while the number of long positions has risen by 222 contracts.


However, traders should note that the volatility level of silver is higher than other precious metals. This must be taken into consideration.

IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Copyright © 2022 – All rights reserved.

NAGA is a trademark of The NAGA Group AG, a German based FinTech company publicly listed on the Frankfurt Stock Exchange | WKN: A161NR | ISIN: DE000A161NR7.

Any trademarks appearing on this website are the property of their respective owners.

The NAGA Group AG is the holding company of various companies, such as NAGA GLOBAL LLC, NAGA MARKETS EUROPE LTD, NAGA Technology GmbH, NAGA Pay GmbH and has a close link with NAGAX Europe OÜ.

RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail investor accounts lose money when trading derivatives with this provider. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money.

Trading with NAGA Trader by following and/or copying or replicating the trades of other traders involves high levels of risks, even when following and/or copying or replicating the top-performing traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Before making an investment decision, you should rely on your own assessment of the person making the trading decisions and the terms of all the legal documentation.

Restricted countries: NAGA Group AG does not provide services for the residents of certain countries, such as Afghanistan, Albania, American Samoa, Australia, Barbados, Belgium, British Virgin Islands, Burkina Faso, Cambodia, Canada (including Quebec), Cayman Islands, Central African Republic, Congo, Democratic People's Republic of Korea, Democratic Republic of the Congo, Gibraltar, Guam, Haiti, Iran, Iraq, Isle of Man, Israel, Jamaica, Jordan, Libyan Arab Jamahiriya, Mali, Monaco, Morocco, Myanmar, Nicaragua, Philippines, Russian Federation, San Marino, Senegal, Serbia, Somalia, South Sudan, Sri Lanka, Syrian Arab Republic, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, US Minor Islands, US Virgin Islands, USA, Vanuatu, Yemen, Zimbabwe.

Member of NAGA Group AG that is publicly listed in Frankfurt Stock Exchange.
close icon
By using this website, you agree to our cookie policy