Silver Prices Dip Amid Stronger US Dollar
Silver prices attracted some sellers near $30.20 during the early European session on Monday (13/1). A stronger greenback and rising US bond yields weighed on the USD-denominated commodity prices.
Expectations of a slower pace of interest rate cuts from the US Federal Reserve (Fed) this year amid sluggish inflation and a strong labor market in the US economy could drag the white metal lower in the near term. The US Bureau of Labor Statistics (BLS) reported on Friday that Nonfarm Payrolls (NFP) rose by 256,000 in December compared to 212,000 previously, better than the estimate of 160,000. Additionally, the Unemployment Rate fell to 4.1% in December from 4.2% in November.
On Friday, St. Louis Fed President Louis Alberto Musalem highlighted the need for greater caution in lowering interest rates, adding that the risk that inflation could be stuck between 2.5% and 3% has increased by the time of the December meeting.
However, safe-haven inflows due to uncertainty surrounding President-elect Donald Trump’s policies could help limit the downside in Silver prices. Additionally, strong industrial demand, including applications in electronics, electric vehicles, and solar panels, is expected to push total demand to 1.21 billion ounces despite a 16% decline in physical investment, supporting Silver prices.
Source: FXStreet
