In a recent turn of events, silver and gold prices took a dip in early premarket trading as investors braced themselves for delayed economic data this week, overshadowed by a lack of significant geopolitical news during the holiday-shortened schedule. Spot silver was noted to have decreased by 2%, trading around $74.85 per ounce, while silver futures fell by 4%, settling at approximately $74.70 per ounce.
Leading companies in the silver mining sector experienced notable declines as well. Hecla Mining, which operates the massive Green Creek Mine in Alaska, recorded a drop of 3% prior to market opening. Similarly, Endeavour Silver saw a decrease of 3.5%, First Majestic Silver fell close to 4%, and Coeur Mining experienced a loss of nearly 3.4%. Other notable declines included Teck Resources and Silvercorp Metals, both down around 3%, with Wheaton Precious Metals dropping over 2%.
Despite the resurgence of geopolitical tensions in the Middle East, analysts at Deutsche Bank observed that silver trading was approximately $7 below its historically adjusted price from 1790, highlighting the market’s current undervaluation following recent price declines.
Gold also experienced a downturn, with spot prices falling by more than 1% to $4,931 per ounce, and gold futures dropped nearly 2%, trading at around $4,952 per ounce. Exchange Traded Funds (ETFs) focusing on silver, such as ProShares Ultra Silver, faced significant losses as well, down 7% in premarket activities, while both iShares Silver Trust and ABRDN physical silver fell just over 3%, according to data from FactSet.
The recent fluctuations in precious metal prices can be traced back to events earlier this year in January, when news broke that then-President Donald Trump had nominated Kevin Warsh to head the Federal Reserve. This announcement resulted in a stronger U.S. dollar and instigated a substantial decline in silver futures, which recorded a staggering 30% drop—the most significant single-day fall since March 1980. Nonetheless, the downturn in precious metals proved to be short-lived, with both gold and silver prices bouncing back in early February.
In other developments, Australian global mining company BHP recently reached a significant silver agreement with Wheaton Precious Metals. The deal entails a long-term silver streaming agreement that ensures BHP will receive an upfront payment of $4.3 billion in exchange for the delivery of silver produced at its Antemina mine.
