Silver prices edged further down on Tuesday, as the markets continued to mull the implications of economic data from the US for signals on central bank monetary policy.
Prices dipped to as low as $22.70 an ounce on Tuesday, compared with a high of $23.09 an ounce on Monday. That was the lowest silver price since November 14th.
US inflation figures for November came in broadly in line with market expectations on Tuesday, showing that US consumer prices edged 0.1% higher against October levels. The inflation figures are closely watched because of their implications for interest rate decisions.
The US Fed is widely expected to maintain interest rates at 5.5% in a decision set for Wednesday, while on Thursday the ECB and Bank of England are expected to hold rates unchanged at 4.5% and 5.25% respectively. Potentially of more significance will be any signals on possible rate cuts in 2024, which could create a supportive element for gold and silver prices.
On the demand side, Wednesday is set to see industrial production figures for October in the Euro Area and UK, while Friday will see November industrial production figures from China. Industrial activity can drive direction for silver prices, with approximately 50% of demand for the metal coming from manufactured products such as solar panels, electronics, medical applications, water treatment and aerospace technology.
Carlo is an external market analyst for Kinesis Money. With a credential background in Economic Finance and International Exchange (MA), Carlo’s critical analysis of gold and silver markets’ performance is frequently quoted by leading publications such as Forbes, Reuters, CNBC, and Nasdaq.
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