Gold prices plummet below $80, inflation signals suppress safe-haven demand

Golden Finance reports that on May 16th, silver experienced another week of extreme volatility, with prices ultimately plunging well below $80 per ounce, bringing another round of sharp fluctuations to one of the most turbulent markets of the year. During the week ending Wednesday, silver prices surged as much as 11.3%, driven by investor enthusiasm for AI-related stocks and industrial metals used in data center power systems, wiring, and cooling. On Monday, speculation about fuel supplies from major mining country Peru also pushed prices higher. Subsequently, more signs indicated that the Iran war was intensifying inflation, leading investors to demand higher yields from government bonds, causing silver prices to retreat. Higher borrowing costs are bearish for silver, which typically does not pay interest. HSBC’s chief precious metals analyst James stated, “We still believe silver is fundamentally overvalued, and in the face of high prices, demand for silver in jewelry and industrial sectors will continue to weaken.”