Silver hits 2-week high on strong demand

Silver prices rose on Thursday, extending gains for the third straight day, and hit a 2-week high while on track for the first weekly gain in 5 weeks, thanks to strong safe-haven demand due to concerns about accelerating inflation in most parts of the world.

Silver prices rose 0.9% to the highest since December 1st at $22.67 an ounce, after opening at $22.46, and hit a day high at $22.40.

Silver closed higher by 1.8 % yesterday, the second straight daily gain, and the largest daily gain since November 11.

Silver prices gained 2.2% so far this week, to head for the first weekly gain in 5 weeks, thanks to strong safe-haven demand.

Demand for safe haven assets increased strongly this week, due to warnings by global banks about the rising inflation levels, in addition to taking strict monetary policy measures to counter this danger.

The Federal Reserve said on Wednesday that it will move quickly in cutting its bond purchases by next March, and hinted three rate hikes by the end of 2022

Federal Reserve Chairman Jerome Powell expressed more flexibility to raise interest rates sooner, and said that the economy no longer needs increasing support, especially after prices and wages grew, and the rapid improvement in the labor market.

The Bank of England surprised the markets after it decided to raise interest rates by 15 basis points to 0.25%, in the first time since the beginning of the pandemic.

The European Central Bank said it would reduce bond purchases in the coming period, but ruled out raising European interest rates in the next year.