Silver holds above two-week trough as dollar dips

Economies.com
2023-06-16 11:54AM UTC

Silver prices rose in European trade on Friday, holding above two-week lows plumbed yesterday, on track for the second profit in three days, as the dollar index declined against most major rivals.

 

The white metal was boosted as well by improving actual demand in China, with authorities launching stimulating measures to boost growth.

 

Prices

 

Silver prices rose 0.6% to $24.04 an ounce, with a session-low at $23.83, after falling 0.2% yesterday, the third loss in four days, after trimming a 3% loss away from two-week lows at $23.22.

 

The Dollar

 

The dollar index fell 0.1% on Friday, sharpening losses for the fourth straight session, and plumbing five-week lows at 102.05 against a basket of major rivals.

 

A batch of weak US data this week showed the economy is slowing down markedly with consumer and producer prices tapering off, in turn hurting prospects of US policy tightening this year.

 

Thursday data showed factory output tumbled unexpectedly in May with the manufacturing sector suffering from higher interest rates, with US imports falling last month.

 

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Other data showed US unemployment claims remained rather high at 262 thousand last week, way above expectations of 246 thousand.

 

The Fed

 

As expected, the Federal Reserve announced a temporary pause in the measures of policy tightening yesterday.

 

The Federal Reserve maintained interest rates unchanged between 5% and 5.25% as expected, the highest since August 2008.

 

The Fed said it'll continue to monitor data and economic developments in order to modify policies accordingly.

 

Chinese Demand

 

Chinese authorities launches a program of monetary stimulation that includes interest rate cuts on deposits and short-term borrowing costs following a host of weak Chinese data that stoked concerns.

 

Such measures alongside more aggressive spending by the government is expected to boost demand on silver and metals.

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