FX.co ★ Silver Holds at 7-Week High

Silver prices climbed above $63.50 per ounce on Monday, their highest level in seven weeks, as markets grew more confident that the Federal Reserve is unlikely to raise interest rates again this year. The shift in sentiment followed an unexpected decline in nonfarm payrolls in July, driven by a drop in labor force participation. Expectations for fewer rate hikes were reinforced by oil prices holding well below the peaks reached earlier this year during the Iran-related war scare, easing pressure from energy-driven inflation.

With financial conditions now seen as unlikely to tighten significantly, precious metals benefited from a reduced opportunity cost of holding non-yielding assets. At the same time, industrial demand continued to underpin silver prices. Chinese imports of silver-bearing ores surged 62.5% year-on-year in June to 219,000 tonnes, consistent with expanding output in sectors such as solar panel manufacturing and electricity grid infrastructure. Even so, persistent risks of renewed energy price spikes kept silver trading not far above the seven-month low of $55 per ounce, recorded on July 16th.