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The United States and China become enemies of silver! Prices reduced by Rs 10,000 in India, here’s the thing

Sagar Patel

By Sagar Patel

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In the last one month, the price of silver has fallen by more than Rs 10,000.

For some time now there has been a large drop in the price of silver. Silver has hit its lowest level in 6-7 weeks in the Indian market. If you look at the data, silver prices are down about 11 percent from their all-time high. According to experts, the price of silver is falling due to reduced demand and decisions by the United States Central Bank. According to experts, there does not seem to be any special trigger regarding silver in the coming days. However, the target by the end of the year is Rs 1 lakh. Let’s try to understand through the language of statistics, what has been the price of silver?

Silver prices on MCX fell to a six- to seven-week low of Rs 86,156 per kg on Wednesday amid strong comments from US Federal Reserve officials on rate cuts amid strengthening of the US dollar and rising Treasury bond yields. What is special is that in the last four trading days the price of silver has dropped by 6 percent.

When the Multi Commodity Exchange closed on Wednesday, the price of silver stood at 86,900. Silver prices hit an all-time high of Rs 96,493 per kg on May 29. It has since seen a drop of 10.71 percent. This means that the price of silver has fallen by Rs 10,337 per kg from its all-time high in a span of about a month.

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What does the Federal Reserve say?

Federal Reserve Governor Michelle Bowman said Tuesday that the central bank is not prepared to cut rates and is willing to raise them if inflation remains high. Similarly, Federal Reserve Governor Lisa Cook said a rate cut at some point could be appropriate, but the timing is uncertain. San Francisco Federal Reserve Bank President Mary Daly said Monday that the U.S. central bank should not cut rates until policymakers are sure inflation does not reach 2 percent. However, she also highlighted the threat of rising unemployment.

Possible interest rate cut in September

In June, business in the United States had reached a 26-month high. Investors are now focusing on economic data due this week for signs of the first rate cut. Although the chances of a summer rate cut seem unlikely, investors are confident that the Federal Reserve could potentially cut interest rates in September. According to CME Group’s Fed Watch tool, traders currently see a 67.7 percent chance of a rate cut. At its last policy meeting, the Federal Reserve had kept interest rates unchanged at 5.25 percent to 5.50 percent, a 23-year high. Apart from this, the Federal Reserve had changed its previous estimate of three rate cuts to one.

Investors are watching closely

This week, investors are closely monitoring key economic indicators, such as the US first-quarter GDP estimates due out on Thursday and the personal consumption expenditure (PCE) price index report due out on Friday. The special thing is that if the personal consumption spending figures improve, then a new drop in the price of silver can be observed. Meanwhile, looking at the economic outlook, there has been a drop in American consumer confidence. At the same time, American families are very enthusiastic about the labor market and expect inflation to slow next year. Thanks to the strength of the labor market, the Federal Reserve has been able to keep interest rates high for a long time. On the other hand, low demand from China has also affected silver sentiment.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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