Silver Breaks All-Time High: Here's the Main Trigger
Silver prices hit a new all-time high after the market digested a series of mixed US economic data overnight. While some of the data looked "okay," the majority of signals indicated the US economy was cooling, which is usually fuel for precious metals.
From the labor sector, job gains were modest, while the unemployment rate rose. For the market, this is a sign of a easing labor market. When the labor market cools, the chances of the Fed adopting a more "friendly" (less restrictive) stance typically increase—and that supports silver.
Further strengthening sentiment was wage data. Monthly wage increases were lower than expected, indicating easing labor cost pressures. When wages slow, the market often expects inflation to be more subdued, leading to a decline in yields and the dollar—a situation that often makes silver more attractive.
On the consumption side, the data was also mixed: headline retail sales were flat, but core retail sales were strong. This led the market to believe the economy wasn't collapsing, but rather was actually slowing. For silver, these conditions could be "just right": recession fears aren't yet dominant, but expectations of lower interest rates remain.
The business activity indicator (PMI) suggests the economy is still expanding, as the figure remains above 50, but momentum is weakening. For silver, this is important because silver is not only a precious metal but also used in industry. So, as long as the economy continues to grow slightly, industrial demand won't disappear, while the "safe haven" side will still receive support.
The next focus will be on inflation data (CPI) tomorrow, Thursday. If the CPI is lower than expected, the market could become more confident about future interest rate easing—and silver has the potential to strengthen further. However, if the CPI overheats, silver could be vulnerable to a rapid correction, as the dollar and yields typically rise. (asd)
Source: Newsmaker.id
