Silver Weakens Slightly, Upward Bias Maintained
Silver prices weakened slightly in US trading on Wednesday, holding near $44/oz, a 14-year high. Sentiment remains supported by expectations of two more Fed rate cuts this year, although Jerome Powell's cautious tone maintains near-term uncertainty. A surging US dollar and flat US Treasury yields have limited profit-taking, keeping the upward bias intact ahead of Friday's PCE release—the Fed's favorite inflation gauge.
Fundamentally, industrial demand remains the backbone of the rally: China's photovoltaic/solar panel supply chain and semiconductor spending are driving silver consumption for conductive pastes and precision applications. Fundamental flows into precious metal-based instruments remain solid, helping to contain volatility as prices approach record levels. Amidst stagnant mine supply and price-sensitive scrap, market balances tend to be tight, making silver responsive to surprises in inflation data and dollar movements.
Geopolitics also provides support for the safe haven. Russia-NATO tensions and energy infrastructure disruptions are boosting demand for hedge assets, with gold leading the way and silver following suit. Looking ahead, US PCE and jobless claims data will be key indicators: cooling inflation could potentially strengthen the Fed's easing scenario and extend silver's consolidation above $43.5–$44.0, with the $44.5–$45.0 area serving as the next psychological target.
Source: Newsmaker.id
