Silver Prices Decline on Soft Demand

Silver ingot and  gold bullion. Finance illustration

 

Silver prices declined on Monday, as demand for precious metals remained soft in the wake of the US Federal Reserve’s first interest rate hike of the year.

March silver futures were down 13 cents, or 0.8%, at $16.09 a troy ounce at 7:42 am ET. The futures price was trading near session lows.

Silver prices declined 4.4% last week, including a more than 7% plunge on Thursday following the Federal Open Market Committee (FOMC) rate decision.

Gold futures nudged higher after last week’s sharp decline. The February futures price was up $3.70, or 0.3%, at $1,141.10 a troy ounce. Bullion rose as much as 0.6% earlier in the session.

The US dollar held steady Monday after powering to new highs last week. The US dollar index was last seen trading just below 103.00. A stronger dollar tends to weaken demand for precious metals, which are themselves priced in the US currency.

Precious metals were rocky Monday despite weaker demand for global equities. Asian equity markets were down across the board, with mainland China’s Shanghai Composite Index slipping 0.2%.

European silver stocks also backtracked from 2016 highs as a large bank rally paused.

US equity futures were trading higher in pre-market activity, pointing to a positive open for Wall Street.

In economic data, German business confidence surged to 34-month highs in December, signaling renewed momentum in Europe’s largest economy. The Munich-based IFO institute said its business climate index, which is based on a survey of around 7,000 firms, rose to 111.0 from 110.4 in November.

“The German economy is making a strong finish to the year,” IFO chief Clemns Fuest said in a statement.

Earlier in the day, the Japanese government reported trade figures that were better than forecast. Yen-denominated exports declined by just 0.4% in the 12 months through November, a far smaller drop than the 10.3% contraction of October. It was also the smallest year-over-year decline since September 2015. Meanwhile, imports fell at a smaller 8.8% annualized rate, half the pace of the October drop.

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