Silver prices rise on inflation data

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Unfavourable inflation data supports the possibility of a Federal Reserve rate cut in 2024, leading silver prices to rise 1.38% to ₹88,392. Core PCE prices, the central bank’s preferred inflation gauge, grew at their slowest pace in six months. Despite the central bank’s ambitious forecast for two 25 basis point rate cuts next year, market sentiment has shifted towards the possibility of more substantial devaluation. The silver market’s upward trend was reinforced by a strong revision in US GDP and a drop in jobless claims. Industrial demand for silver is a key component, as the Silver Institute sees the global silver deficit narrowing by 4% to 182 million ounces in 2024.

Despite a 16% decline in physical investment, registered industrial use and demand for jewelry sales are forecast to increase to 1.21 billion ounces. Meanwhile, recycling is expected to increase by 5%. Mining supplies are expected to increase by 1% due to increased production in the United States, Mexico and Chile. Silver imports will almost double this year, from 560 metric tons in the first half of 2024, to 4,554 metric tons in the same period the previous year.

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