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Silver about to mark largest quarterly profit since 2022
Silver prices rose in American trade on Friday on track for the second profit in a row, moving away from six-week lows as the dollar lost ground.
The white metal is heading for the largest quarterly profit since 2022, on strong retail demand and the global cycle of policy easing.
Prices
Silver prices rose 2.25% today to $29.63 an ounce, with a session-low at $28.78.
On Thursday, silver prices rose 0.75%, the first profit in three days away from recent six-week lows at $28.57.
The Dollar
The dollar index fell 0.15% on Friday on track for the second straight session away from an eight-week high at 106.13 against a basket of major rivals.
The dollar’s decline came after US personal spending data, which slowed down considerably, thus reducing inflationary pressures on the Federal Reserve.
Following the data, the odds of a Fed 0.25% interest rate cut in September rose from 64% to 66%, and rose to 78% in November.
Quarter Trades
Silver prices are up 18% so far this quarter on track for the third quarterly profit in a row, and the largest since 2022.
Silver marked a 12-year high on May 20 at $32.52 an ounce on strong retail demand.
Investors demand on precious non-yielding metals also spiked amid a policy easing spree from global central banks recently.
Retail Demand
As retailers seek assets to guard against potential risks as global central banks change their policies to a more accommodative direction, it’s clear that silver is becoming an excellent under-valued choice.
The recent silver surge tipped off many retailers that silver remains far from its true value compared to gold, which is trading at record highs.
Gold hit a record high of $2450 an ounce on April 20, while silver is very far away from its record high of $49.78 scaled in April 2011, in turn triggering strong demand on the white silver for its potential hidden value.
Historically, silver had usually taken wider and more aggressive movement arcs upside and down compared to gold, although recent times were an exception. Now retailers are paying more attention to the missing silver value.
Wall Street edge down as the last session of the quarter wraps up
Most US stock indices declined on Friday, the last session of both June and the second quarter, following data.
Government data showed US personal spending, the Federal Reserve’s favorite inflation gauge, rose 2.6% y/y in May, slowing down from 2.8%.
It’s the lowest such pace since March 2021, when it pierced the Fed’s targets for the first time in the current economic cycle.
On trading, Dow Jones rose 0.1%, or 11 points to 39,175 as of 17:47 GMT, while S&P 500 fell 0.1%, or 3 points to 5480, as NASDAQ shed 0.2%, or 44 points to 17,816.
Dollar trades near eight-week high ahead of US spending data
The US dollar rose in European trade on Friday against a basket of major rivals, resuming gains and almost touching eight-week highs, while on track for the second quarterly profit in a row.
The gains come ahead of important US personal spending data, which is the Federal Reserve’s favorite gauge for inflation.
The Price
The dollar index rose 0.2% to 106.12, with a session-low at 105.83.
The index closed down 0.1%, the first loss in three days on profit-taking away from eight-week highs at 106.13.
Quarterly Trades
The US dollar index is on track for a 1.5% profit this quarter.
Strong Demand
The dollar is buoyed by strong haven demand as investors dump the euro amid political concerns in Europe, especially the upcoming French elections.
The Federal Reserve also underpinned the dollar by maintaining interest rates unchanged for the seventh meeting in a row, while central banks in Europe, Canada, and Switzerland started to cut rates recently.
US Rates
The markets are pricing in a 64% chance of a Fed September interest rate cut, and a 76% chance of such a cut in November.
US Data
The developments came ahead of important US personal spending data for May, which is considered the Fed’s favorite gauge for inflation.
Gold moves in a positive zone ahead of US spending data
Gold prices rose in European trade on Friday for the second day, while moving in a positive zone and about to mark the third quarterly profit in a row as global easing measures gain momentum, while China buys large amounts of gold.
The gains came ahead of important US personal spending data, the Fed’s favorite inflation gauge, which will provide important clues on the future of US interest rates.
Prices
Gold prices rose 0.2% today to $2331.95 an ounce, with a session-low at $2319.
On Thursday, gold prices rose 1.3%, the first profit in three days away from two-week lows at $2293 an ounce.
Quarterly Trading
Gold prices are up 4.25% this quarter, about to mark the third quarterly profit in a row on strong haven demand and Chinese purchases.
US Rates
The markets are pricing in a 64% chance of a Fed September interest rate cut, and a 76% chance of such a cut in November.
US Data
The developments came ahead of important US personal spending data for May, which is considered the Fed’s favorite gauge for inflation.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat yesterday at 829.05 tonnes, the lowest since June 14.