Silver Price News: Silver Hits Six-Week High On Interest Rate Cut Hopes

Silver prices rose to their highest since late May on Thursday, after US inflation and jobs figures raised hopes of interest rate cuts.

Silver prices climbed as high as $31.78 an ounce on Thursday, compared with around $30.87 an ounce in late trades on Wednesday, about a 2% day-on-day gain. That was the highest price for silver since May 30 – a six-week high.

The market got a shot in the arm from figures released Thursday showing slower than expected US inflation in June as well as lower than expected initial jobless claims figures for the week to July 6.

The latest round of data painted a slightly gloomier than expected picture for the US economy, in turn adding weight to calls for interest rate cuts – an outcome that would boost demand for non-yield-bearing assets like gold and silver.

US inflation levels have been trending lower since March, although remain well above the Fed’s target of 2%. The aggressive interest rate hikes seen in 2022 and the first half of 2023 are therefore showing signs of having the desired effect on cooling inflation, raising the prospect of cuts before the end of the year.

The US dollar also weakened against other currencies after the inflation figures were released on Thursday, adding further support for silver prices.

Looking ahead, upcoming data releases include Friday’s US producer price index for June and the Michigan consumer sentiment figures for July, for a pulse-check on the health of the US economy.

Friday will also see Indian industrial production and manufacturing production figures for May. As one of the world’s top consumers of silver, industrial activity in India plays into the global demand picture for silver as a key metal in the production of solar panels, battery systems, electronic circuits, electric cars and a host of other industrial applications.