Silver Price News: Silver Dips as Gold Softens, US Dollar Gains

Silver prices were marginally lower on Tuesday, following further weakness in the gold market as precious metals prices came under pressure from a stronger US dollar.

Prices edged to an intraday low of $30.23 an ounce on Tuesday, before recovering to around $30.60 an ounce later in the day. That compared with around $30.80 an ounce in late trades on Monday.

Both gold and silver prices have moved lower since the US election, with the markets seemingly unwinding hedged positions. Gold prices fell to a two-month low on Tuesday, providing a bearish backdrop for silver.

Precious metals prices were also under pressure from a resurgent US dollar, which strengthened against other major currencies on Tuesday following the US election.

Silver price weakness was also linked to disappointment over China’s recent debt package announced last Friday, which appeared not to include direct stimulus measures that could have boosted the economy.

Indian industrial activity perks up

However, silver’s day-on-day losses were somewhat mitigated by Indian industrial production figures released on Tuesday which showed a surprise increase to 3.1% in September, compared with market expectations of a 2.5% gain. The rise, which followed a disappointing set of numbers in August, sent a supportive signal for industrial demand for silver in India, one of the world’s largest consumers of the metal.

Mexico’s Fresnillo reports production issues

In other news, shares in Mexican precious metals mining company Fresnillo fell almost 8% on Tuesday after the company said a silver production partner and largest shareholder had reported operational difficulties at a mine in Mexico.

Partner company Industrias Peñoles SAB said the problems at the Sabinas mine were impacting silver production, according to news reports on Tuesday. Fresnillo is the world’s largest producer of silver from ore and Mexico’s second-largest gold miner.

Upcoming data to keep an eye on

Looking ahead, Wednesday will see the release of US inflation numbers for October, followed by Producer Price Inflation figures on Thursday, which may provide further clues on monetary policy by the US Fed in the coming weeks.