BlackRock's silver ETF increases holdings as prices drop

Silver prices dropped by more than 6% on October 14, falling below $55.6 per ounce, marking a three-month low. Despite the price decline, the iShares Silver Trust (SLV), the world’s largest silver ETF managed by BlackRock, purchased nearly 13 tons of silver during the session. This follows two consecutive sessions of net buying totaling over 25 tons, bringing the fund's total holdings to approximately 15,370 tons.

The sell-off in precious metals, which also saw gold prices drop nearly 1.5% below $4,100 per ounce, was driven by higher-than-expected U.S. consumer inflation data. September's Consumer Price Index (CPI) rose 0.6% from the previous month and 3.7% year-over-year, exceeding the forecasted 3.6%. Core inflation also rose 2.6% year-over-year, surpassing market expectations. A 9.1% increase in gasoline prices contributed to more than half of the monthly CPI rise.

These inflation figures have increased market expectations that the Federal Reserve may tighten monetary policy further, with the probability of an October interest rate hike rising from 21% to 47%. The resulting rise in U.S. Treasury yields and a stronger U.S. dollar have placed additional downward pressure on silver and other precious metals.