Silver continued gains on hopes of slower rate hikes
SILVER- Silver prices rose on Tuesday for the third straight session, hitting four-week highs as demand strengthens on the white metal.
There are multiple reasons behind this historic profit for silver, that we can condense into two, the first is the collapse in US treasury yields, and the second is an expected surge in actual demand on the metal in upcoming months.
Yesterday silver settled by 1.46% at 62470 in hopes of slower rate hikes after data showed price pressure cooling in the United States. Despite the cooler-than-expected inflation print for October, Fed officials stated that the central bank is not softening its battle against inflation. Still, silver prices are over 12% higher in November, as data consolidating the easing inflation trend lowered bets on the Federal Reserve’s terminal rate. Money markets believe that the Fed will raise its target funds rate by 50bps in its December meeting, slowing from four consecutive 75bps rate hikes delivered since June. While bullion is commonly used to hedge against inflation, higher interest rates increase the opportunity cost to hold non-interest-bearing assets, denting its appeal.
