Silver on track for largest monthly profit since 2020

Silver prices rose on Friday after a two-day hiatus, on track for the largest monthly profit since 2020 on strong retail demand. 

The white metal is benefitting from slower US 10-year treasury yields, as investors now await crucial US personal spending data, which will help determine the likely path ahead for monetary policies.

Prices

Silver prices rose 0.45% today to $31.32 an ounce, with a session-low at $30.78.

Prices lost 2.5% on Thursday, the second loss in a row on profit-taking off 12-year highs. 

Monthly Trades

Silver prices are up an excellent 19% so far in May, on track for the largest monthly profit since 2020.

The white metal marked a 12-year peak on May 20 at $32.52 as most non-yielding assets rallied back then, 

Such gains were underpinned by the weaker dollar and US treasury yields following forecast-missing inflation and growth data. 

Retail Sales

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. 

US Yields 

US 10-year treasury yields fell 0.3% today away from four-week highs at 4.638%, underpinning non-yielding assets such as gold. 

US Rates

The market odds of a Fed 0.25% rate cut in September stand at 51%, and a 64% for a November rate cut.

According to the Fedwatch tool, investors now expect a single Fed interest rate cut in 2024. 

US Personal Spending Data

Investors await important US personal spending data, which the Fed relies on heavily to measure the path of inflation.