Silver prices eased back slightly on Tuesday as dollar strength and rising treasury yields weighed on the white metal.
Prices slipped as low as $24.04 an ounce on Tuesday, compared with around $24.50 an ounce in late deals on Monday.
The backdrop for silver was bearish on the day, with the US dollar gaining ground against other major currencies, which put pressure on dollar-denominated silver and gold. US treasury yields also strengthened on Tuesday, which added to the bearish picture for precious metals as non-interest-bearing assets.
The underlying driver for the markets was US inflation data released Tuesday, which came in above market expectations andsuggested less pressure on the US Fed to start cutting interest rates any time soon. Recent data from interest rate traders has pointed to the start of a loosening of monetary policy as soon as June.
The slight pull-back for silver follows a strong period in the first half of March, which took prices to three-month highs, with silver following in gold’s wake as the yellow metal hit all-time highs.
Looking ahead, eyes will be on Wednesday’s Euro Area industrial production figures for January for the latest check on Europe’s industrial health. Silver’s resistance to oxidation and corrosion and its highly conductive, reflective and anti-bacterial properties make it a critical metal in the manufacture of a broad range of high-tech, industrial and medical products.
The markets will also be watching out for Thursday’s US producer prices for February as well as monthly retail sales, for the latest signals on the US economy and any potential implications for future interest rates.
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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