Stories
Silver Prices Could Drop to 50 Dollars an Ounce, Warns Bloomberg Analyst
- •Bloomberg Intelligence commodity expert Mike McGlone predicts that silver prices could potentially drop to 50 dollars an ounce.
- •The recent price correction comes after 46 years, driven by extreme volatility and rapid surges similar to the 1979-80 market cycle.
- •In India, if international prices fall to 50 dollars, retail rates could see a significant reduction of roughly 34000 rupees per kilogram.
- •McGlone notes that silver prices need to climb above 84 dollars an ounce and sustain there for market confidence to return.
- •Rising US Treasury bond yields and inflation concerns could also put additional downward pressure on precious metals like gold and silver.
Key Questions Answered
Bloomberg Intelligence commodity expert Mike McGlone states that international silver prices could drop to $50 an ounce from the current level of around $59. In India, based on a reference rate of Rs 2.20 lakh per kilogram, a corresponding 15.4% decline could reduce prices to about Rs 1.86 lakh per kilogram.
According to Mike McGlone, silver prices need to climb above $84 an ounce and sustain themselves there for confidence to return to the market. Moving from the current price to $84 would require a rally of roughly 42%.
Gold and silver prices could face downward pressure because yields on 5-year US Treasury bonds are at a two-decade high. Since precious metals do not pay interest, attractive returns in government bonds may cause investors to pull money out of metals and invest in bonds.
