Silver Drops to Over 3-Month Low
Silver eased to below the $29 per ounce mark, the lowest level since September, amid the outlook of a hawkish Fed and uncertain demand for silver’s industrial utility.
Concerns of stubborn inflation drove the FOMC to project fewer rate cuts for the upcoming year, driving markets to trim their exposure to non-yielding bullion assets. While the earlier rate cuts by the Fed supported bullion enough to raise silver prices by 23% this year, pessimistic demand for silver as an industrial input drove the metal to sharply underperform gold in the period.
Overcapacity in China’s solar panel industry drove photovoltaic companies to sign up for a government self-discipline program that aims to regulate supply, limiting the outlook of silver demand from its top industry.
Pressure was also noted from the threat of a yuan devaluation in accordance with China's looser monetary policy stance, lowering asking prices from one of the world's top exporters.
Source : Trading Economics
