Silver price hits $45 amid equity market weakness

[Redator]

Silver prices rose above $45 an ounce for the first time since 2011 on Thursday, bolstered by an increased risk-off sentiment in equity markets amid worries about the trajectory of the US economy.

Spot gold hit an intraday high of $45.07 — its highest in over 14 years — before pulling back to around $44.70 per ounce, for a 1.8% rise.

Click on chart for live prices.

The move takes silver’s year-to-date gains up to over 55%, surpassing that of its more expensive sister metal gold, which has seen multiple record highs this year. The bullish drivers include a weakening US dollar, relentless central bank buying and rising geopolitical risks.

Surging demand for gold exchange-traded funds this month is also signalling a growing clamor for safe-haven assets. Inflows into global gold ETFs surged to a record $10.5 billion so far in September, with year-to-date inflows exceeding $50 billion, according to Citigroup.

“ETF has outshined all other gold demand sectors this year and is the single most important contributor to the gold price rally in our view,” the bank’s analysts said in an emailed note.

Gold price poised to break out: Sprott

In recent weeks, precious metals have been gaining momentum as markets anticipated the beginning the Federal Reserve’s rate cut cycle. Since its first 25-basis-point cut last week, US stock markets have come under pressure amid stretched asset valuations.

The second-quarter GDP data on Thursday clouded the Federal Reserve’s policy path, as a surprise economic lift may have dampened expectations of further cuts.

Looking ahead, traders will focus on the US personal consumption expenditures price index due Friday. The Fed’s preferred measure of underlying inflation likely grew at a slower pace last month, which would boost the argument for rate cuts.

“Softer inflation could strengthen the case for Fed rate cuts, supporting bullion, with markets pricing two cuts this year,” Kaynat Chainwala, analyst at Kotak Securities, said in a Thursday note.

(With files from Bloomberg)

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