The American producer price index (PPI) for January rose 3.5% on an annual basis, exceeding predictions and strengthening inflato pressure. In the meantime, the US dollar weakened for the fourth consecutive session, making gold more attractive for foreign buyers.
However, the cautious attitude of the Federal Reserve with regard to tariff reductions can limit further profits. FED chairman Jerome Powell repeated that tariff adjustments would only come up with clearer evidence of cooling inflation.
Silver peaks as the demand for safe port activa grows
Silver (XAG/USD) climbed to $ 32.93, supported by a softer dollar and falling treasury yields. The metal has risen almost 5% this month, driven by an increased demand for safe port assets and robust industrial consumption. The renewable energy sector continues to stimulate the demand of the silver, in particular for the production of solar panels.
“Silver not only follows gold,” noted James Anderson, senior metal analyst at MarketView. “It benefits from a structural increase in industrial use in addition to its safe port-starting power.”
Despite the Bullish Momentum, the silver prices can be confronted with resistance if the Federal Reserve maintains its ragless attitude. Higher interest rates usually dampen the attraction of non-efficiency assets such as silver.
Economic data and trade policy keep the markets sharp
Investors keep a close eye on the upcoming American retail sales report, which could influence the process of the dollar. A stronger than expected reading can strengthen the Greenback, which puts pressure on gold and silver prices. In the meantime, the initial unemployed claims fell to 213,000, indicating a resilient labor market that supports the cautious approach to the FED.