Housing, which represents 70% of Chinese household wealth, remains a drag on growth. New home prices fell at the fastest pace since 2015, highlighting continued weakness in the sector. In addition, crude steel production – a barometer of construction activity – fell for the fourth month in a row in September. Despite some positive industrial production data, analysts warn that China’s stimulus measures may not fully reverse these structural problems.
Gold hits record highs as geopolitical risks increase
Gold broke through the $2,700 barrier for the first time on Friday, reaching an intraday high of $2,714.14. Rising geopolitical tensions in the Middle East, especially the conflict between Israel and Hezbollah, have driven investors toward gold as a safe haven. This rally has also boosted silver, which tends to follow gold’s moves due to its dual role as a precious metal and an industrial commodity. Silver benefits from the strength of gold, especially during periods of heightened uncertainty, as traders often seek both metals and safe havens.
Gold is up more than 2% this week, driven by expectations of further monetary easing and increased risk aversion. Silver, closely correlated with gold, rose along with it, benefiting from the same market dynamics.
US Treasury yields and dollar strength are limiting silver’s gains
U.S. Treasury yields held steady after data showed strong retail sales in September, signaling resilience in the U.S. economy. This has dampened expectations for immediate interest rate cuts, lending support to the US dollar. The stronger dollar has curbed some of silver’s potential gains as it makes the metal more expensive for international buyers. However, geopolitical risks and economic uncertainty continue to drive demand for precious metals.
Market forecast
Silver appears poised to break its multi-year high of $32.96. If this breaks, prices could rise to $34.35 in the short term. Continued stimulus from China and geopolitical risks are likely to provide further support, although US dollar strength could limit upside potential. Traders should watch for further policy developments from China and any shifts in global risk sentiment, which could drive volatility in silver markets.