Silver Price News: Silver Drifts Back Below $32.00 An Ounce

Silver prices eased lower on Friday, showing a modest pull-back having rallied to a 12-year high on Thursday.

Prices drifted to as low as $31.41 an ounce on Friday, compared with Thursday’s high of $32.75 — the highest price for silver since December 2012.

US figures released Friday showed that the US PCE price index rose by less than market expectations in August, supporting calls for further interest rate cuts in the coming months. US personal income and spending figures were also below expectations, compounding the effect of the price index numbers.

The latest figures appeared to give silver a boost, given that they support further cuts to interest rates, helping prices rise to $32.28 an ounce on Friday afternoon. However, the gains were short-lived and prices fell back later in the session, following in the wake of gold prices which came back off on Friday from the previous day’s record high.

On the technical charts, silver’s recent upside breakout from a three-month downtrend is likely to focus minds on what is now a rising trend channel which started at the recent lows on August 7. If monetary policy continues to loosen as expected, this could help silver continue this uptrend. Lower interest rates not only reduce the opportunity cost of holding non-yielding investments but also make borrowing cheaper, boosting economies and likely improving industrial demand for silver.