Silver (XAG/USD) surged to near $31.50 during Friday’s New York session, gaining traction even as the US Dollar (USD) held steady following the release of September’s Producer Price Index (PPI) data. The USD Index (DXY), which measures the Greenback against a basket of six major currencies, hovered around the 103.00 level.
The PPI report revealed that annual headline producer inflation rose by 1.8%, surpassing expectations of 1.6%. Despite the increase, it was lower than the upwardly revised 1.9% figure for August. Core PPI, which excludes food and energy prices, climbed to 2.8%, slightly above forecasts of 2.7%, and marked an upward revision from 2.6% to 2.4%.
Month-on-month, headline producer inflation remained unchanged, reinforcing market expectations of further rate cuts by the Federal Reserve (Fed). The CME FedWatch tool indicates a strong probability that the Fed will lower interest rates by 25 basis points in November, bringing them to 4.50%-4.75%.
The Fed had already initiated its policy-easing cycle in September with a 50-basis point rate cut, prompted by concerns over the labor market and confidence that inflation will steadily return to the 2% target.
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