Silver futures rallied sharply on Monday, climbing 8.4% to settle at $83.325 per ounce as the U.S. dollar index fell 0.8% to 96.83. The move extended Friday's substantial gains, with spot silver advancing 6.3% following a nearly 10% jump in the previous session.
Market Drivers and Trader Focus
The precious metal's surge coincided with declining Treasury yields and a softer dollar, as investors positioned themselves ahead of critical economic indicators. Market participants now anticipate the Federal Reserve's first interest rate cut to occur in June, according to CME Group's FedWatch tool.
Bart Melek, global head of commodity strategy at TD Securities, attributed the price action primarily to dollar movements, noting that silver's tight supply conditions can amplify price swings even with modest buying activity.
Related Assets Follow Higher
The iShares Silver Trust (SLV) mirrored the commodity's advance, closing up 8.28% at $76.00 before dipping slightly in after-hours trading. Silver mining equities also participated in the rally, with First Majestic Silver gaining approximately 8%, Pan American Silver rising 6.8%, and Hecla Mining increasing about 5.1%.
Silver exhibits dual characteristics as both a precious metal sensitive to currency and rate expectations and an industrial commodity with substantial manufacturing demand, which can create volatile and uneven price patterns.
Key Data and Outlook
The U.S. Labor Department's January Employment Situation report is now scheduled for Wednesday, February 11, followed by the January Consumer Price Index on Friday, February 13. Both releases were delayed and their timing remains subject to change following recent government service disruptions.
Market direction for silver appears heavily dependent on this week's economic data and subsequent dollar movements. Continued dollar weakness could support further gains, while a resurgence in the currency would likely pressure the metal given its historical volatility.
