Key Highlights

  • December silver futures fell $3.08 to $61.72 an ounce, while spot silver slipped to $61.53.
  • Market reports also listed Pan American Silver and Wheaton Precious Metals among the day's decliners.
  • The Metals Royalty Company, a small-cap Nasdaq-listed name, jumped to $4.95, moving against the sector.
  • The S&P 500 fell 59.72 points to 7,683.69 and the Dow dropped 347.11 points to 51,481.51.

Silver sank more than $3 an ounce on Monday, September 28, falling even harder than gold, and silver-focused Mining stocks took a heavy beating as yields and the dollar climbed.

Silver's steep drop

Silver had an ugly day. December silver futures fell $3.08 to $61.72 an ounce, while spot silver slipped to $61.53. In relative terms, silver fell more steeply than gold, which itself suffered its worst day since June.

That is typical for silver, and it made Monday a painful session for anyone holding the white metal.

Silver often behaves this way. It trades like a more volatile cousin of gold, so when precious metals sell off, it tends to drop further. It also has heavy industrial uses, in electronics and solar panels, so worries about growth can add to the pressure.

Why metals sold off

The drivers were the same ones that hit gold. The 10-year Treasury Yield rose to its highest level since 2007, the dollar firmed, and traders raised their bets on another Federal Reserve rate hike. The Fed raised rates in September for the first time in three years, and futures now price a strong majority chance of another move at the October 28 meeting.

Precious metals pay no interest, so rising yields make them less attractive. A stronger dollar makes them pricier for overseas buyers.

Miners in the crossfire

Mining stocks tend to magnify moves in the metals they produce, because their profits depend on the gap between the metal price and their costs. When silver drops sharply, that Margin shrinks fast.

Coeur Mining (NYSE:CDE), which produces silver and gold, fell sharply on Monday amid the metals selloff.

Market reports also listed Pan American Silver (NASDAQ:PAAS) and Wheaton Precious Metals (NYSE:WPM) among the day's decliners. No company-specific news was found for these names; they moved with the metal prices.

One odd exception

Not everything fell. The Metals Royalty Company, a small-cap Nasdaq-listed name, jumped to $4.95, moving against the sector. No company-specific news was found for the stock on Monday.

The wider market

Materials were among the sectors leading the market lower. The S&P 500 fell 59.72 points to 7,683.69 and the Dow dropped 347.11 points to 51,481.51. Only three S&P 500 sectors rose: consumer staples, health care and energy.

For Indian investors, silver prices at home track global moves and the rupee. A stronger dollar can offset or amplify what local buyers pay.

Metals stay tied to yields and the dollar

The metals will stay tied to yields and the dollar this week. Thursday's ISM Manufacturing survey matters too, given silver's industrial role. Mining investors will also watch whether companies update guidance as the quarter ends on Wednesday, and whether bargain hunters step in after such a sharp drop in both the metal and the stocks that dig it out of the ground.