USD Pressure Eases, Silver Gains Confidence
Silver (XAG/USD) strengthened in the European session above $50 a troy ounce on Tuesday, extending earlier this week's gains amid falling US bond yields and a gradual weakening of the dollar. Market sentiment improved following apparent progress toward the end of the US government shutdown, which is expected to reopen the flow of official data (jobs, inflation) and provide clarity on the direction of monetary policy. Expectations of a Fed rate cut in December remain a key driver for non-interest-bearing precious metals like silver, keeping buying interest high despite increased intraday volatility.
On the fundamental demand side, a solid industrial outlook—particularly for electric vehicles and photovoltaics—continues to support prices. Solar panel manufacturers continue to see strong demand heading into the end of the year, while low factory inventories in some regions are encouraging anticipatory buying. On the supply side, the relatively inelastic nature of mining supply (as silver is largely produced as a byproduct) limits a quick response to price increases, so the recurring market deficits of recent years remain a supporting narrative.
However, short-term upside remains influenced by two factors: the delayed release of US data following the shutdown and the direction of the dollar. If official data returns to show a slower economy and more subdued inflation, the chances of further Fed easing will increase—silver's bias remains positive. Conversely, if the dollar rebounds sharply or yields recover, silver's rally risks stalling and triggering profit-taking ahead of key releases.
Source: Newsmaker.id
