FX.co ★ Silver Approaches 14-Year High

Silver prices have ascended to $39 per ounce, nearing the 14-year high of $39.5 reached at the end of July. This surge is driven by expectations of interest rate reductions by the Federal Reserve, as well as evaluations of silver's industrial demand. The Federal Reserve is now weighing the risks of a weaker labor market against inflation, following adjustments to employment data and an uptick in unemployment rates. Such considerations likely necessitate a shift in monetary policy, potentially leading to a 25 basis point rate cut in the forthcoming September meeting. Additionally, market participants are increasingly predicting a total of three rate cuts this year, which would bolster non-yielding precious metals. On the industrial front, recent figures reveal a 70% increase in China's solar cell exports during the first half of the year, spurred by heightened photovoltaic demand from India. This follows China's installation of over 93 gigawatts of solar panel capacity in May—a 300% annual increase to a new record high—preempting a series of policy changes that might complicate grid connections for these panels.