Silver surpasses $42 an ounce, scales 14-year peak

Silver prices rose in the European market on Friday, extending gains for the third day in a row, surpassing the psychological barrier of $42 an ounce for the first time since 2011, marking a new 14-year high, and heading for a fourth consecutive weekly gain.

A series of weak data on the US labor market, along with moderate US inflation figures, boosted expectations that the Federal Reserve will cut interest rates by 25 basis points next week.

Price Overview

• Silver prices today: Silver rose by 2.2% to $42.47, the highest since September 2011, from the opening level of $41.57, with a low of $41.40.

• At Thursday’s settlement, silver gained 1.0% in its second consecutive daily rise, supported by declines in the dollar and US yields.

Weekly Trading

Over the course of this week, which officially concludes at today’s settlement, silver is up about 3.5% so far, heading for its fourth consecutive weekly gain.

These weekly gains are attributed to strong demand for precious metals as a safe haven, amid mounting concerns about rising global debt levels and escalating geopolitical tensions in the Middle East and Eastern Europe.

US Interest Rates

• Weekly jobless claims rose last week, confirming a significant weakening in the labor market. This followed last Friday’s US employment report, which indicated that job growth nearly stalled in August alongside a higher unemployment rate.

• According to the CME FedWatch tool: the probability of a 25 basis point rate cut at the September meeting is currently priced at 100%, while the chance of a 50 basis point cut stands at 7.5%.

• The probability of a 25 basis point rate cut in October is also fully priced in at 100%, with the chance of a 50 basis point cut steady at 6%.

• The Federal Reserve meets next week to discuss monetary policy adjustments in line with US economic developments, with a 25 basis point rate cut widely expected.

Chinese Demand

Industrial activity in China exceeded expectations in August, recording its fastest pace of growth in five months, according to recent data released in Beijing, in the latest sign of improving economic activity in the world’s largest consumer of metals and commodities.