Silver prices rose sharply on Friday, tracking broad gains across precious metals as investors scaled back expectations of further US interest rate hikes following softer than expected American jobs data.
Spot silver was up 2.3 percent at 62.41 dollars per ounce, near its highest level in more than a week and on track for a weekly gain, as weaker than expected nonfarm payrolls and private payrolls data eased concerns around inflation and higher for longer interest rates in the United States. Nonfarm payrolls increased by 57,000 jobs last month, sharply below the 110,000 expected by economists in a Reuters poll, prompting traders to price in roughly a 54 percent chance of a rate hike in September, down from 66 percent before the data, according to the CME FedWatch Tool.
Kelvin Wong, senior market analyst at OANDA, said the reduction in rate hike pricing for the rest of this year and into the first quarter of next year has been driven primarily by the weak labour market data. The dollar was headed for a weekly drop, making dollar priced silver more affordable for holders of other currencies, a dynamic that has supported the broader rally across precious metals this week. Platinum and palladium also gained on the day, both trading near their highest levels in more than a week.
On the Multi Commodity Exchange, silver futures rose 1.72 percent to Rs 2,37,327 per kg, up Rs 4,023 from the previous close of Rs 2,33,304. The contract has gained 7.83 percent over the past five trading days, though it remains down 11 percent over the past month and largely flat on a six month basis, having fallen 0.72 percent. On a longer horizon, MCX silver futures are up 120.95 percent over one year, 236.89 percent over five years and 432.24 percent over ten years, underscoring the scale of the metal’s multi year rally even amid recent short term volatility.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The figures and securities mentioned are for analysis and illustration, not recommendations. Markets carry risk, and readers should conduct their own research or consult a registered financial adviser before making any investment decision.
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