Silver Prices Stable Above $41, Market Awaits US Inflation Data
Silver prices traded stable in the European session on Tuesday at around $41.2 per ounce, after a slight 0.16% decline in the previous session. This movement follows a strong rally last week that took silver to its highest level since 2011. Currently, market participants are holding back ahead of the release of US producer price inflation (PPI) and consumer price inflation (CPI) data, which are expected to determine the direction of commodity markets, including precious metals.
Expectations of a Federal Reserve interest rate cut this month remain the dominant factor supporting silver prices. Last week's weak US employment data raised confidence that the Fed would cut interest rates by 25 basis points, with some market participants even beginning to anticipate the potential for a more aggressive rate cut. Looser monetary policy typically benefits silver and gold by suppressing bond yields and weakening the US dollar, thereby increasing the attractiveness of non-yielding assets like precious metals.
In addition to monetary factors, industrial demand also continues to boost silver's prospects. The growing demand for solar panels and environmentally friendly technology in China and India is driving consumption of this metal to record levels. Furthermore, global uncertainty, ranging from geopolitical tensions to economic risks stemming from new US tariffs, has investors increasingly turning to silver as a hedge. If US inflation data this week reinforces signs of economic weakness, silver prices could retest the psychological level of $42 per ounce in the near future.
Source: Newsmaker.id
