Silver prices surged toward $31 per ounce on Thursday, reaching a one-month high as softer underlying inflation in the US supported bets of further interest rate cuts from the Federal Reserve this year. Core inflation unexpectedly slowed in December, while headline inflation remained in line with expectations. The prospect of lower US rates could stimulate demand for commodities by boosting economic growth and weakening the dollar. Despite the bullish momentum, silver prices remained below the 12-year high of $35 reached in October, due to concerns over uncertain demand from its manufacturing uses. In particular, overcapacity in China’s solar panel industry has led photovoltaic companies to join a government-led self-discipline program aimed at regulating supply, which could limit silver demand from the sector, the metal’s top industrial user.
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