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Silver prices rallied 2.0% on Thursday, trading around $29.30 following the release of mixed US Producer Price Index (PPI) data for August. While the monthly PPI rose by 0.2%, exceeding expectations, annual figures were lower, causing the US Dollar to weaken and boosting precious metals. In addition, India’s silver imports are set to nearly double in 2024 due to increasing demand from the solar panel and electronics sectors. This surge in imports, alongside declining inventories, has contributed to strong support for global silver prices, which are nearing decade highs. The combination of weaker US economic data and robust industrial demand is driving silver’s bullish momentum.

Key Highlights

* Silver jumps 2.0% following the release of mixed US Producer Price Index data.

* Monthly PPI rose higher than expected, boosting precious metals' performance.

* US Dollar weakness spurred by inflation data supports silver’s price rally.

* India's silver imports are set to double in 2024 due to rising industrial demand.

* Global silver prices approach decade highs, driven by demand in electronics and solar sectors.

Silver prices surged over 2.0% on Thursday, following the release of the US Producer Price Index (PPI) data for August. The PPI, often viewed as a leading indicator of broader inflation, came in with mixed results. While the monthly figure exceeded expectations with a 0.2% rise, the annual readings fell short. This combination led to a decline in the US Dollar, which bolstered silver and other precious metals.

The PPI ex Food & Energy increased by 2.4%, remaining steady compared to July’s revised data, but below the anticipated 2.5% growth. Despite these mixed signals, the uptick in monthly PPI, alongside rising jobless claims, exerted downward pressure on the dollar. This created favourable conditions for silver prices, which are inversely correlated with the US Dollar’s performance.

In addition to US inflation data, rising demand for silver from India is providing further support to the metal. India, the world’s largest silver consumer, is on track to double its silver imports in 2024 due to strong demand from the solar panel and electronics industries. In the first half of 2024, India's imports soared to 4,554 metric tonnes mpared to just 560 tonnes during the same period last year.

Finally

Silver’s upward momentum is supported by weak US Dollar performance and surging demand from India, with prices approaching decade highs as global demand grows.

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