Silver Defies Hawkish Fed Rhetoric, Closes Above $70
Silver finished Thursday's session at $70.06 per ounce, up 2.9 percent on the day, in contrast to a decidedly hawkish tone from Federal Reserve Chair Kevin Warsh at Jackson Hole.
The Fed chair warned that inflation is not cooling fast enough and that the central bank 'still has work to do,' which increased rate expectations to as much as 58 percent according to the CME FedWatch tool.
Silver's resilience in the face of this headwind can be attributed in part to its industrial demand anchor, which analysts note sets it apart from gold. This structural support allowed silver to close above the psychologically important $70 mark despite a 4 percent drop at its worst and trading in a $66-to-$69 range.
Supply disruptions are also contributing to the bull case for silver, with production snags across Latin America tightening the physical market. Mexico, Peru, and Chile saw August production hit by separate disruptions, resulting in an estimated 1.1 million ounce shortfall.