Silver Breaks $45, Hot US Data No Obstacle
Silver prices continued their rally and topped $45 per troy ounce, supported by safe-haven demand and solid industrial sentiment. However, the euphoria was tempered after a series of stronger-than-expected US data (lower jobless claims, a higher revision of second-quarter GDP) lifted bond yields. As a result, silver's rally tended to be moderate as the strengthening dollar/yields limited short-term upside.
On the policy front, the market still values the possibility of two Fed rate cuts by year-end, although cautious comments from central bank officials and solid data make the pace of easing debatable. For silver, the direction of interest rates is important due to the opportunity cost of holding a non-yielding asset. Geopolitical uncertainty (Russia-Ukraine, the Middle East) also maintains hedging interest, so investors tend to buy the dip.
Physical fundamentals remain the main support. Industrial demand from solar panels, electric vehicles, and electronics remains resilient, while silver supply—much of which is a byproduct of base metal mining—is struggling to accelerate despite high prices. Near-delivery premiums remain elevated at some hubs, indicating tight availability. Looking ahead, market focus shifts to Friday's PCE release (the Fed's favorite inflation measure); a below-expected figure could weaken the dollar and strengthen silver, while an inflation surprise could depress prices.
Source: Newsmaker.id
