Vivek Dhara's Silver Forecasts: What's Behind the Sharp Commodity Sell-Off in Response to Powell's Policy?

In recent days, global commodity markets have experienced a significant shift, during which silver and gold lost their shine, and investors changed their expectations regarding the Federal Reserve’s policy. Analysts from CBA indicate that this shift reflects profound changes in the perception of Jerome Powell’s monetary policy, the effects of which are felt not only in precious metals but across the entire commodity sector.

Silver and gold under pressure from a strengthening dollar

Expert analysis of current events shows that the simultaneous sell-off of silver, gold, and oil is not coincidental. Vivek Dhar explains that, considering market mechanisms, investors are withdrawing from both asset classes—equities and precious metals—at the same time. This move signifies a shift toward a more cautious interpretation of Powell’s future policy, which more investors now see as more restrictive than previously expected.

The US dollar, which has been strengthening amid these sentiments, further burdens commodity markets. Silver, like other metals, is under pressure from the rising dollar exchange rate, while industrial metals and oil also reflected broad risk aversion that affected Asian stock markets at the beginning of the week.

Hawkish Powell outlook fuels investor caution

The start of the week was filled with key information—corporate earnings, central bank meetings, and macroeconomic data. In this context, the perception of a more hawkish stance by Powell became a key factor shaping investment strategies. The market is solidifying expectations that the Federal Reserve Chair will maintain restrictive monetary conditions for an extended period, representing a significant shift from earlier scenarios that anticipated a faster easing of policy.

However, Dhar warns against hastily interpreting the current decline as a structural change in commodity market fundamentals. His analysis distinguishes between a temporary correction in prices and a lasting change in trend directions. This distinction is crucial for understanding whether the current sell-off represents a new reality or is a transitional adjustment within a broader upward cycle.

Long-term forecasts: opportunity or correction?

Despite the significant market movements in recent days, Vivek Dhar maintains his long-term outlook for silver and gold. His forecasts suggest that gold prices could reach $6,000 in the fourth quarter of this year, even after the recent shake-up in the precious metals market.

Dhar’s core argument is that the current sell-off should be viewed as an opportunity rather than a capitulation signal. His forecasts imply that the fundamentals supporting higher silver and gold prices remain intact, despite the currently negative short-term market sentiment. This perspective emphasizes investors’ ability to distinguish between transient shocks and deeper structural changes in commodity price trends.