Silver prices rebounded back up through the $23.00 an ounce mark with ease on Friday, having traded as low as $22.49 an ounce on Thursday.
Gold and silver prices both surged on Friday, with silver reaching a high of $23.55 an ounce. The latest catalyst was a combination of macro-economic data and rising geopolitical tensions in the Middle East.
US inflation figures for December released on Friday showed a surprise fall, increasing the chances that the US Fed will need to start cutting interest rates soon, and this provided a shot in the arm for zero-yield assets like precious metals.
Silver also received a bullish signal after reports that a US-led coalition had launched extensive air strikes against Houthi-controlled military assets in Yemen. Any escalation of conflict is bullish for gold and silver as it drives investment flows away from risky assets into perceived safe havens.
By Friday evening, silver prices had moderated slightly to trade at around $23.20 an ounce, down from the intraday highs.
Looking ahead, Monday will see the release of Euro Area Industrial Production figures for November. Market expectations are for around a 0.3% reduction from October levels, following two previous monthly contractions.
Silver’s highly conductive, reflective and anti-bacterial properties make it a critical metal in the manufacture of a broad range of high-tech and industrial products, which account for roughly 50% of demand for the metal, making levels of industrial production a key input for overall demand.
Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.
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