silver prices experienced a rise following softer inflation data from the United States, which has led to increased speculation regarding potential interest rate cuts by the Federal Reserve in 2025. The price for silver , expressed as XAG/USD, stabilized around $30.70 per troy ounce during the Asian trading session on Thursday. This increase is attributed to the lower-than-expected inflation figures for December that suggest a more dovish monetary policy from the Fed in the coming months.
Concurrently, yields on U.S. Treasury bonds, specifically the 2-year and 10-year notes, were reported at 4.27% and 4.66%, respectively, with both yields witnessing a decline of over 2% on Wednesday. The U.S. Dollar Index, which assesses the dollar’s strength against six major currencies, traded near the 109.00 level, continuing its downward trend for the fourth consecutive session. A weaker dollar further bolsters silver ’s appeal to international buyers, subsequently increasing its demand.
The Consumer Price Index (CPI) in the U.S. revealed a year-over-year increase of 2.9% in December, a slight rise from 2.7% in November, aligning with market projections. On a monthly basis, the CPI registered a 0.4% increase after a 0.3% rise in November. Meanwhile, the Core CPI, which excludes volatile sectors such as food and energy, grew 3.2% year-over-year in December, slightly down from 3.3% the previous month and in line with analyst expectations. The month-to-month change for Core CPI was 0.2% in December.
In the broader context, overcapacity concerns within China’s solar panel industry have prompted numerous photovoltaic companies to engage in a government-led self-discipline initiative aimed at regulating supply. This move could impact silver demand from a critical sector. Moreover, allegations of forced labor in solar panel manufacturing facilities in China’s Xinjiang region have resulted in the U.S. enforcing import restrictions on certain manufacturers, which further complicates the market outlook for silver .
