Spot Silver held close to a 14-year high of $47.83/oz. on Thursday, as the US government shutdown triggered a rush to safe-haven assets after partisan divisions prevented Congress and the White House from securing a funding deal.
As a result, hundreds of thousands of federal workers will be furloughed and essential services – halted. A long shutdown could delay crucial economic data, including Friday’s Non-Farm Payrolls report, ahead of the upcoming Federal Reserve policy meeting.
Markets are now pricing in about a 99% chance of a 25 basis point Fed rate cut in October and an 87% chance of another 25 bps cut in December.
Lower interest rates tend to reduce the opportunity cost of holding Silver, which pays no interest.
On the data front, US private payrolls reportedly decreased by 32,000 in September after a revised down 3,000 drop in August.
A day earlier, the JOLTS report revealed marginal growth in US job openings in August, coupled with a drop in hiring.
Additionally, robust industrial demand continued to support Silver prices amid supply constraints. Silver is facing its fifth successive year of a structural market deficit, with output of 844 million ounces well short of demand.
The white metal plays a key role in solar energy, electronics and broader electrification efforts.
Spot Silver was last up 0.36% on the day to trade at $47.49 per troy ounce.
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