Weaker Dollar Boosts Silver as Fed Rate Hike Bets Diminish
Silver prices surged in recent trading, settling 0.20% higher at ₹235,924, thanks to a weaker US dollar and downbeat economic data that reduced expectations of a Federal Reserve rate hike in September.
The disappointing numbers included a 0.6% month-on-month decline in US retail sales in July, which missed forecasts of a 0.1% rise. The University of Michigan consumer sentiment index also dropped to 51 in early August from 55.2 in July, below expectations of 54.5.
The weaker dollar and softer inflation data combined to support precious metals, with silver benefiting from the shift in market sentiment. However, the global silver market remains structurally tight, on track for a sixth consecutive annual deficit.
London vault holdings increased 1.7% month-on-month to 28,082 tonnes at end-June, valued at approximately $53.1 billion. Chinese imports of silver-bearing ores surged 62.5% year-on-year in June to 219,000 tonnes.