Silver Drops Below $31.7 Per Ounce
Silver prices fell to below $31.7 per ounce on Wednesday, underperforming other bullion assets amid uncertainty over Chinese industrial demand and weaker currencies for major silver exporters.
Reports indicated that the Chinese government is willing to devalue the yuan in response to tariff threats from the US, consistent with its pledge to loosen monetary policy, making Chinese exports cheaper for foreign markets.
In the meantime, skepticism about whether the economic support that China pledged to deliver will drive industrial demand to gain traction also weighed on sentiment. In turn, overcapacity in China’s solar panel industry drove photovoltaic companies to sign up to a government self-discipline program that may regulate supply, limiting the outlook of silver input demand.
On the monetary policy front, the Fed is due to cut its interest rate by 25bps in the final meeting of the year, reducing the opportunity cost of holding bullion assets.
Source : Trading Economics
