Spot Silver held near a 14-year peak of $44.47/oz. on Thursday, as market players awaited the US PCE inflation data for fresh clues on the Federal Reserve’s monetary policy trajectory.
Annual core PCE inflation probably remained steady at 2.9% in August, according to market consensus, while annual PCE inflation probably accelerated to 2.7% from 2.6% in July.
Federal Reserve Chair Jerome Powell said this week the US central bank had to continue balancing the competing risks of high inflation and a weakening job market in its future policy decisions.
The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting.
Markets are now pricing in about a 92% chance of a 25 basis point Fed rate cut in October and a 25% chance of another 25 bps cut in December.
Lower interest rates tend to reduce the opportunity cost of holding Silver, which pays no interest.
Additionally, robust industrial demand continued to support Silver prices amid supply constraints. Silver is facing its fifth successive year of a structural market deficit.
Spot Silver was last up 0.24% on the day to trade at $44.02 per troy ounce.
Meanwhile, Silver futures for December delivery were last up 0.27% to trade at $44.313 per troy ounce.
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