Silver Plummets as Gold Holds Ground Amid Precious Metals Correction

Silver led a sharp retreat in precious metals on Thursday, falling 4.8% to settle at $29.72 per ounce, marking its steepest single-day drop in three weeks. Gold, by contrast, rebounded 1.9% to close at $2,043.50, erasing much of its prior weekly losses. The widening gap between the two metals highlighted a growing preference for gold as a safe-haven asset amid shifting market sentiment. The divergence reflects underlying supply-demand dynamics, with silver’s industrial applications—particularly in solar panels, electric vehicles, and electronics—facing renewed headwinds. A 2.3% decline in global manufacturing PMI data released earlier in the day fueled concerns over industrial demand, directly impacting silver’s fundamental outlook. Gold, lacking significant industrial exposure, remained insulated from such cyclical pressures. Silver’s weekly performance turned negative, losing 3.1% for the week, while gold gained 0.7% over the same period. The relative weakness in silver has prompted increased speculation about a potential squeeze in ETF holdings, with silver ETFs reporting a net outflow of 12.4 million ounces in the past five days. Gold ETFs, meanwhile, saw a modest 3.1 million-ounce inflow. Market participants are now assessing whether the outperformance of gold could persist into the coming weeks, especially as U.S. Treasury yields remain elevated and central bank gold purchases continue to underpin demand. The move underscores the growing bifurcation in precious metals, with gold reinforcing its role as a macroeconomic hedge and silver facing challenges from both macroeconomic and industrial factors.