Silver prices rose for a second consecutive day, coming in at $27.80, an increase of over 1% during late Monday trading in North America. This occurred as US Treasury bond yields rallied. Despite the expectation that the US Federal Reserve might deliver two cuts, silver prices increased.
Usually, higher yields have a negative impact on precious metals. However, in this instance, silver managed to maintain its value and even appreciate. This could be down to the robust industrial demand for silver, which remained steady despite market fluctuations.
The Federal Reserve’s suggestions of fewer interest rate cuts have led some investors to consider silver as a safer investment option. Still, the price of silver is significantly influenced by the global political and economic climate. Therefore, investors should keep a close eye on these factors.
The rise in silver prices mirrors the ongoing gold rally, highlighting the increased worldwide demand for precious metals. This is clear from the notable increase in gold reserves held by central banks around the globe. Both individual and institutional investors are regarding gold and silver as a solid and attractive alternative investment.
Resilience in silver prices amid bond yield rally
Economic uncertainty and the volatile nature of stock markets primarily drive this behavior.
Silver prices may continue to rise, potentially surpassing the $28.00 mark. Despite the Relative Strength Index suggesting that silver could be ‘overbought’, some financial analysts predict that the price will stabilize between $27.00 to $28.00 before possibly rising again. Investors need to stay vigilant and monitor the market carefully.
Open Market investments contain inherent risks, including the potential loss of the entire investment, emotional stress, and the full costs associated with investments. The investor bears these risks. Investment decisions can lead to emotional anxiety due to potential financial loss, on top of the obvious financial impacts. There are costs associated with investments such as commission fees, service charges, and other investment costs that investors need to cover.
Alongside silver, gold prices have also attracted investors for three consecutive days. The focus this week is on the US CPI on Wednesday. Predictions suggest an increase of 0.4% m/m and 3.1% y/y. The unpredictable nature of the geopolitical climate and the instability of the stock market have driven the demand for safe-haven assets. Analysts are keeping an eye on the Federal Reserve for any signs of change towards inflation, which could impact the precious metals market considerably.
