FX.co ★ Silver Holds Strong Momentum

Silver prices reached $37.7 per ounce on Tuesday, continuing a strong upward trend seen since the beginning of the year. This surge is fueled by robust industrial demand and the anticipation of interest rate cuts by the Federal Reserve. Notably, China installed over 93 gigawatts of solar panel capacity in May, marking a remarkable 300% increase from the previous year, setting a new record high just before upcoming policy changes are expected to make grid attachment of panels more challenging. Moreover, the State Grid Corporation of China announced it would invest over $90 billion in grid enhancements this year to prevent solar power curtailment. This investment aims to mitigate concerns about future demand for photovoltaic panels, which significantly rely on silver as a primary industrial component. Meanwhile, the latest Consumer Price Index report showed no substantial upward pressure, prompting markets to increase bets on a potential interest rate reduction by the Federal Reserve in September. Alongside the disappointing ISM Purchasing Managers' Index results and the downward revision of non-farm payroll figures, these factors have bolstered the appeal of bullion assets, which do not yield.