Silver marks biggest profit since 2008 .. why?

Economies.com
2022-10-04 09:55AM UTC

Silver prices rose on Tuesday for the third straight session, hitting four-week highs as demand strengthens on the white metal. 

 

Silver marked the biggest profit since September 2008 yesterday as most commodities and metals surged as well.

 

There are multiple reasons behind this historic profit for silver, that we can condense into two, the first is the collapse in US treasury yields, and the second is an expected surge in actual demand on the metal in upcoming months. 

 

Silver Prices

 

Silver rose 1.8% on Tuesday to $21.04 an ounce, the highest since June, after spiking 9% on Monday, the second profit in a row, and the largest since September 2008. 

 

US Treasury Yields

 

US 10-year treasury yields fell 2.2% today for the second straight session, hitting two-week lows at 3.564% and boosting non-yielding assets like silver. 

 

US ISM manufacturing PMI tumbled to 2-1/5 year lows in September, triggering concerns about the health of the economy in the third quarter.

 

The data cut chances of a 0.75% rate hike by the Federal Reserve at the November meeting from 62.5% to 55%.

 

Actual Demand

 

The Indian government announced a raise in import taxes on platinum from 10.75% to 15.40% in an attempt to achieve equivalency in importing taxes between silver, gold, and platinum.

 

Such restrictions on platinum are expected to boost actual demand on gold and silver, with India considered the world's second largest consumer of both metals. 

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