However, expectations of a rate cut by the Federal Reserve have put additional pressure on the U.S. dollar, which has supported silver to a certain extent and helped limit its losses.
Silver prices may stabilize amid supply shortages
Silver prices are likely to stabilize due to potential supply shortages. Mining production faces challenges from labor shortages and strict environmental regulations, leading to tighter supplies.
The Silver Institute expects 2024 to be the fourth consecutive year of supply shortages. Navneet Damani, senior vice president and head of commodities research at Motilal Oswal Financial Services, highlighted these concerns in Business Standard.
Despite weak demand from China, ongoing supply constraints could help stabilize silver prices.
China's economic slowdown curbs silver demand
China's economy grew by 4.7% in the second quarter, lower than the 5.3% growth rate in the first quarter and lower than the expected 5.1%. The slowdown has been attributed to weak consumer spending and a prolonged downturn in the housing market.
Therefore, Chinese policymakers are stepping up efforts to boost confidence and stimulate the economy.
