Spot Silver registered a fresh 34-month high of $28.088 on Monday, even after the latest blowout employment data out of the US prompted investors to pare expectations of a June interest rate cut.
Data showed last Friday that US employers in all economic sectors excluding farming had added 303,000 jobs in March, or the most since May 2023. The data implied the economy probably ended the first quarter of the year on solid ground.
“Resilient economic data are a double-edged sword for markets,” ANZ analysts wrote in a client note, cited by Reuters.
“On the positive side, resilient growth indicates an economy far from recession, but it could also mean the Fed will keep rates higher for longer.”
Markets are now pricing in about a 48% chance of a Fed rate cut occurring in June, compared with 60% a week ago, according to the CME FedWatch tool.
About 62 basis points of rate cuts for this year are now priced, compared with 75 basis points projected by the Federal Reserve.
Market focus now shifts to the US CPI report on Wednesday, which may show core inflation easing to 3.7% in March from 3.8% in February.
As of 7:34 GMT on Monday Spot Silver was gaining 1.17% to trade at $27.815 per troy ounce. Earlier in the session, the commodity touched highs not seen since June 11th 2021.
Silver Futures for delivery in May were gaining 1.41% to trade at $27.890 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching up 0.06% to 104.347 on Monday.
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