Silver prices rose in the European market on Monday to extend gains for the third consecutive session, surpassing the key psychological barrier of $40 per ounce for the first time since 2011, supported by the current decline in US dollar levels against a basket of global currencies.
With strong current expectations that the Federal Reserve will cut interest rates at its September meeting, global financial markets throughout this week await the release of further key data on the US labor market.
Price Overview
• Silver prices today: Silver rose by 2.55% to ($40.76), the highest since September 2011, from the opening level at ($39.74), and recorded a low of ($39.54).
• At Thursday’s settlement, silver prices gained 1.8% in a second consecutive daily increase, supported by declines in the US dollar and Treasury yields.
• Over the course of August, silver prices rose by 8.25%, marking a fourth consecutive monthly gain, supported by higher expectations of US rate cuts and hopes of improved demand in China, the world’s largest consumer of metals.
US Dollar
The US dollar index fell on Monday by 0.3%, deepening losses for the fifth straight session, hitting a five-week low at 97.54 points, reflecting continued declines in the US currency against a basket of major and minor counterparts.
The US Department of Commerce reported on Friday that the Personal Consumption Expenditures (PCE) Price Index rose by 0.2% in July after an unrevised 0.3% increase in June.
This keeps the Federal Reserve on track to resume US monetary policy easing and the widely expected interest rate cut at its next meeting on September 16–17.
US Interest Rates
• In a social media post on Friday, Mary Daly, President of the San Francisco Federal Reserve, reiterated her support for cutting interest rates, citing risks facing the labor market.
• According to the CME FedWatch tool: current market pricing shows an 87% probability of a 25-basis-point rate cut at the September meeting, and a 13% probability of no change.
• Current pricing for the October meeting shows a 94% probability of a 25-basis-point cut, and only 6% for no change.
• To reprice September cut expectations, markets are awaiting a series of key US labor market data: July job openings on Wednesday, US private sector jobs and weekly jobless claims on Thursday, and Friday’s nonfarm payrolls report for August.
Chinese Demand
Industrial activity in China exceeded expectations in August, recording the fastest pace of growth in five months, according to data released by RatingDog in Beijing, in the latest sign of improved economic activity in the world’s largest consumer of metals and commodities.
