Weaker US Dollar and Easing Yields Support Metals

Silver prices rebounded, finding support from a broad-based weakening of the U.S. Dollar which corrected to three-week lows amid unconfirmed reports of a potential US-Iran agreement. This speculation also contributed to a retreat in U.S. Treasury yields, further bolstering non-yielding assets. However, market sentiment remains cautious as the risk of future Federal Reserve interest rate hikes could limit upside, with analysts seeing a potential December increase as the cycle's peak.

Global Central Banks Maintain Hawkish Tone on Inflation

Central banks outside the U.S. continue to signal a firm stance against inflation, creating a complex global monetary policy landscape. Bank of England officials expressed concern that policy is not yet restrictive enough to cool wage growth, while the European Central Bank is grappling with core inflation pressures stemming from high energy costs. Similarly, rising market odds for a Bank of Canada rate hike reflect concerns over inflation and a difficult growth trade-off.

Asian Economic Indicators Show Signs of Strength

Recent economic data from Asia points to a solidifying growth picture, which could support industrial commodity demand. China’s Q3 GDP growth firmed up, accompanied by an acceleration in September industrial production and a narrowing contraction in fixed asset investment. In another positive sign for regional trade, Malaysia reported that both its exports and imports for September far exceeded expectations.