Silver Prices Headed for Weekly Drop; Dollar Gains After UK Election

London (June 9)  Silver prices declined for a third straight session Friday, putting the metal on course for its first decline in four weeks after a disappointing election for the U.K.’s Conservative government.

July silver futures dipped 8 cents, or 0.5%, to $17.33 a troy ounce at 7:24 a.m. ET. The contract traded within a range of $17.24 and $17.50 overnight.

The grey metal tumbled roughly 2% over the past three sessions, putting it on track for a weekly loss of more than 1%.

Gold prices also dipped through early morning trade following a sharp correction on Thursday. The August futures contract edged down $3.90, or 0.3%, to $1,275.50 a troy ounce, its lowest settlement of the week.

Gold’s premium over silver has declined nearly 3% over the past month. As of Thursday’s close, one ounce of gold was worth 73.42 ounces of silver.

Silver prices have been prone to wild fluctuations over the past 12 months, even as demand for the grey metal continues to grow.

The U.S. dollar rose on Friday while the pound slumped to seven-week lows after the U.K.’s Conservative party lost its majority in the House of Commons. Early results from Thursday’s election show the Conservatives won 318 seats, four shy of a majority.

However, Prime Minister Theresa May has struck a deal with the Democratic Unionists that will allow her to form a government, according to various sources. She is expected to visit the Queen shortly to confirm the deal.

The U.S. dollar index, which often moves inversely with precious metals, traded 0.4% higher on Friday.

In economic data, China’s consumer price index strengthened 1.5% in May, up from 1.2% the previous month, the National Bureau of Statistics reported Friday. A separate gauge of factory-gate prices known as the producer price index (PPI) weakened to 5.5% annually from 6.4% previously.

Source: EconomicCalendar