Silver prices surged for the third consecutive session, nearing $28.00 per ounce during the early European hours on Tuesday. This upward momentum in silver mirrors the ongoing rally in gold, driven by heightened consumer and industrial demand. Additionally, the increased appetite for precious metals has been bolstered by global central banks expanding their reserves in gold.
The demand for non-yielding assets like silver received further support as US Treasury yields corrected following two days of gains. Presently, the 2-year and 10-year yields on US Treasury bonds stand at 4.78% and 4.39%, respectively.
Traders are eagerly awaiting the release of the US Consumer Price Index (CPI) data scheduled for Wednesday. It is anticipated that the US headline CPI will show acceleration in March, while the core measure is expected to indicate a cooling down. Strong manufacturing data from top consumer China and projections for increased solar installations have provided a positive outlook for industrial metals.
Despite geopolitical tensions easing in the Middle East, with most Israel Defense Forces withdrawing from southern Gaza, silver prices could face downward pressure. The withdrawal, possibly influenced by growing international pressure, has contributed to the de-escalation of tensions. However, peace talks between Israel and Hamas have yielded no progress in Egypt.
Traders are now shifting their focus to the upcoming US inflation data and the release of FOMC minutes this week. These events are expected to provide more clarity on the timing of the Federal Reserve’s monetary policy adjustments.
