Silver Shines Again: Continued Rally Supported by Rate Cut Expectations and US Data
Silver prices surged on Monday, rising above $51 per troy ounce, or more than 2%. This movement marks continued strength after prices held above the support area of around $49 per ounce. This rebound comes after selling pressure last week pushed prices below the psychological level of $50.
The positive sentiment was primarily supported by expectations that the Federal Reserve would cut its benchmark interest rate again at its December meeting, following a quarter-point cut at the end of October. Dovish comments from several Fed officials and signs of gradual weakness in the US labor market increased market bets on further easing, suppressing bond yields and limiting the strength of the US dollar. This potentially lower interest rate environment is generally a favorable combination for precious metals like silver.
Beyond interest rates, silver also benefits from its dual role as an investment asset and industrial commodity, amid geopolitical uncertainty and a global economic slowdown. The dollar's intraday weakness helped maintain buying interest, while investors capitalized on the previous correction to re-accumulate. Looking ahead, market participants will focus on the release of US retail sales data, jobless claims, and producer inflation as key indicators of future price direction.
Source: Newsmaker.id
