With the dollar rising, silver – a dollar-denominated asset – is becoming more expensive to foreign buyers, reducing its appeal.
China’s trade surplus complicates the outlook for silver
China’s growing trade surplus, which rose to $95.27 billion in October – well above expectations of $75.1 billion – points to robust global demand, especially for industrial goods.
Exports grew 12.7% year-on-year, well above the expected 5% increase, indicating resilient external demand that could boost the use of silver in manufacturing.
However, Chinese imports fell 2.3%, worse than the expected 1.5% decline, indicating subdued domestic consumption.
The conflicting data keeps the outlook for silver neutral to slightly bullish, as industrial demand could drive prices higher, but weak domestic demand in China could limit gains.
Upcoming Fed Rate Cut: A Potential Tailwind for Silver
Market expectations of a 25 basis point rate cut by the US Federal Reserve at its upcoming November meeting provide a cautious tailwind for silver. The CME FedWatch Tool shows a percentage of 98.1% likelihood of a rate cut, reflecting strong investor consensus.