Silver Spikes to Two-Month High Amid Industrial Demand and Debasement Trade
Silver prices have reached a two-month high of $68.2 per ounce on Wednesday, driven by strong industrial demand and the reignition of the debasement trade.
The US Treasury's announcement to double the buyback of long-term maturities has added to efforts that limit the surge in longer ends of the curve, lowering borrowing costs and signaling the federal government's attempt to suppress yields.
This move lifted the outlook on dollar liquidity and raised risks on higher deficit spending, prompting investors to pivot toward hard assets that defend against a lower purchasing power.
The industrial demand for silver is also supporting bids, as Chinese imports of silver-bearing ores surged 62.5% annually in June to 219,000 tonnes, aligning with an expanding production for solar panels and electricity grids to accommodate the central government's soaring electrification trend.