Posted 13th December 2023

Silver Price News: Silver Falls To One-Month Low Ahead of Interest Rate Decisions

silver in retreat as dollar strengthens

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.

KAG/USD 1-hourly

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.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.

Read our Editorial Guidelines here.