During Thursday’s European trading session, silver prices (XAG/USD) climbed to approximately $30.50, buoyed by expectations surrounding China’s upcoming third plenum meeting on Friday. Investors are optimistic that China’s Communist Party will unveil strategies to stimulate economic growth through expanded fiscal and monetary policies.
As the world’s second-largest economy and a key consumer of silver, China is grappling with sluggish GDP growth. Recent figures indicate that the economy expanded by just 0.7%, falling short of the projected 1.1% and below the previously reported 1.5%, which was later revised down from 1.6%.
In the US, anticipation that the Federal Reserve will initiate interest rate cuts at the September meeting has put pressure on the US Dollar (USD) and bond yields. Lower yields on interest-bearing assets diminish the cost of holding non-yielding investments like silver.
Conversely, the US Dollar Index (DXY) has risen to 103.80, and 10-year US Treasury yields have climbed to 4.17%, although they remain near multi-month lows.
Speculation regarding Fed rate cuts has increased due to moderating inflationary pressures and a cooling labor market. Notably, US annual core inflation, which excludes food and energy prices, slowed for the third consecutive month in June. Additionally, the headline inflation rate declined for the first time in over four years during the same month.
