Silver Drops Below 70 Mark. Precious Metals Under Collective Pressure, Liquidity Preference Dominates Market

TradingKey - The precious metals market continues to weaken, with silver falling over 7% at one point and breaking below the key 70 level intraday to hit a periodic low. Following the pullback in gold, silver's decline has further widened, signaling a clear divergence among safe-haven assets.

Market analysis suggests that the core driver of the current downward trend in precious metals is a tightening macro liquidity environment. On one hand, recent US inflation data has been stronger than expected, heightening market expectations that the Federal Reserve will maintain high interest rates, with rising real rates weighing on non-yielding assets. On the other hand, the persistent strength of the US dollar has put pressure on dollar-denominated precious metal prices.

Meanwhile, the safe-haven logic in the market is also shifting. Despite geopolitical risks not having fully dissipated, capital has not flowed broadly into gold and silver but has instead shifted more toward cash and US dollar assets, reflecting a short-term "liquidity-first" allocation strategy.

In terms of asset characteristics, silver possesses dual attributes as both a precious and an industrial metal. Its price is influenced not only by safe-haven sentiment but is also closely tied to global economic expectations. As expectations of a growth slowdown intensify, concerns over industrial demand are also weighing on silver.