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Silver
Source: Newsmaker.id
The price of silver (XAG/USD) fell by approximately 3% on Thursday (October 29), hitting a year-to-date low of around US$52.32 per troy ounce. This downward pressure occurred despite a weakening US dollar, suggesting that silver’s current movement is driven primarily by expectations regarding Federal Reserve interest rates.
Pressure intensified following US economic data that bolstered the likelihood of a rate hike in December. The core PCE (Personal Consumption Expenditures) price index for September rose by 0.3% month-on-month, while annual core inflation climbed to 3.1%—remaining well above the Federal Reserve’s 2% target.
Regarding economic growth, the US economy has demonstrated resilience. Preliminary estimates for third-quarter GDP show an annual growth rate of 3.4%, surpassing the 3.2% forecast and marking an improvement over the previous quarter’s growth. Consequently, the market now estimates an approximately 80% probability of a rate hike in December.
At its October meeting, the Federal Reserve opted to keep interest rates within the 3.75%–4% range. However, the central bank emphasized that inflation remains high and reaffirmed its commitment to restoring price stability as a top priority.
Newsmaker Analysis: The combination of persistent inflation and robust economic growth serves as a primary headwind for silver. Higher interest rates increase the opportunity cost of holding non-yielding assets, leading investors to refrain from purchasing silver. As long as expectations for a December rate hike persist, XAG/USD is likely to remain under pressure. (arl)
Source: Newsmaker.id