Spot Silver Breaks Through $90 Per Ounce For First Time

Justin

Commodity

Forex

Summary:

Silver prices rose more ‍than 3% to $90 per ounce by 0308 ‍GMT.

Spot Silver Breaks Through $90 Per Ounce For First Time_1

Silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth

Spot silver jumped above the key $90 ‌an ounce level for the first ‌time as soft U.S. inflation data cemented ‍interest rate cut bets by the ⁠U.S. Federal ‍Reserve on the ‌back ‌of geopolitical tensions, robust industrial and investment ⁠demand ⁠and tightening inventories.

Silver prices rose more ‍than 3% to $90 per ounce by 0308 ‍GMT.

Reporting by Ishaan Arora in Bengaluru;

Source: Reuters

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Gerik

Economic

Forex

Dollar Strength Sets The Tone

The Indian rupee entered Wednesday under renewed pressure after U.S. inflation data lifted the dollar to a near one-month high. The one-month non-deliverable forward market suggested the rupee would open in the 90.26 to 90.30 range against the U.S. dollar, compared with a close of 90.19 on Tuesday. Although December’s U.S. headline inflation came in line with expectations and core inflation was slightly softer than anticipated, the data did little to alter the broader outlook for U.S. monetary policy. As a result, the dollar found buyers rather than retreating, reinforcing near-term pressure on emerging market currencies such as the rupee.

The 90.28 to 90.30 region is widely regarded by market participants as a critical near-term support for the rupee. This perception is rooted in recent market behavior rather than coincidence, as the Reserve Bank of India has been seen intervening around these levels. Traders noted that the RBI sold dollars aggressively near this zone last Monday, and the currency again found support there on Tuesday, likely reflecting renewed central bank action. The relationship here is sequential: expectations of intervention shape trader behavior, which in turn concentrates market activity around specific price levels.

Risk Of A Technical Break

Despite recent support, traders warned that the rupee remains vulnerable. One market participant said there was a decent chance the currency could push through 90.30 during the session. A sustained move beyond that level could open the way toward 90.50 to 90.60, shifting attention to how forcefully the RBI might respond. In this context, price action is driven less by new domestic fundamentals and more by the interaction between global dollar strength and perceived intervention thresholds.

The dollar index edged higher in Asian trade, extending Tuesday’s 0.3% gain. Markets continue to expect the Federal Reserve’s first rate cut of 2026 around the June meeting, leaving the dollar broadly supported in the near term. Analysts at MUFG Bank noted that the overall inflationary impact from U.S. tariffs remains contained at an aggregate level, even though individual components showed volatility and lingering effects from data gaps caused by the U.S. government shutdown. MUFG added that it still expects the Fed to cut rates more aggressively than markets are currently pricing, highlighting a divergence between market consensus and some institutional forecasts. For now, however, the dollar’s strength reflects correlation with current rate expectations rather than a decisive shift in the policy outlook.

Flows, Yields, And External Signals

Broader market indicators offered mixed signals for the rupee. Brent crude futures were down 0.2% at $65.3 per barrel, easing some pressure on India’s import bill. The U.S. 10-year Treasury yield stood at 4.18%, reinforcing the dollar’s appeal through higher relative yields. Foreign portfolio flows remained uneven, with foreign investors selling a net $344.6 million of Indian equities on January 12, while purchasing a net $5.4 million of Indian bonds on the same day, according to NSDL data. These flows suggest selective positioning rather than a broad retreat from Indian assets.

Overall, the rupee’s near-term direction hinges on whether global dollar strength persists and how firmly the RBI chooses to defend its perceived support zone. While U.S. inflation data has not fundamentally altered the Fed’s expected path, it has been sufficient to sustain the dollar’s bid, leaving the rupee exposed to further testing of key levels.

Source: Reuters

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Gerik

Economic

Commodity

Silver Breaks Records As Rate-Cut Expectations Build

Silver surged to an all-time high, rising as much as 2.5% to $89.1644 an ounce, while gold traded close to its own record levels. The rally followed U.S. inflation data that came in softer than feared, reinforcing expectations that the Federal Reserve may have room to ease policy further. Although economists cautioned that December’s underlying inflation was artificially depressed by distortions linked to last year’s record-long government shutdown, the data nonetheless shifted near-term expectations toward a more accommodative policy path. This represents a causal relationship, as lower inflation readings directly reduce pressure on central banks to maintain restrictive interest rates, increasing the appeal of non-yielding assets such as gold and silver.

Precious metals have extended the momentum built during last year’s sharp rallies, entering 2026 with renewed strength. Silver had already outperformed gold in 2025, surging almost 150% after a short squeeze in October and persistent supply tightness in the London market. The continuation of gains this year reflects both structural supply constraints and sustained investment demand, rather than a single speculative episode. Gold’s advance has been steadier, reflecting its role as a monetary and geopolitical hedge rather than a pure momentum trade.

Federal Reserve Independence And Market Confidence

Concerns surrounding the Federal Reserve have also played a role in supporting bullion prices. The prospect of a criminal indictment against Fed Chair Jerome Powell has revived anxieties about the central bank’s independence, a cornerstone of U.S. monetary credibility. Central bankers globally have voiced support for Powell, and JPMorgan Chase chief executive Jamie Dimon warned that political interference could backfire. These developments influence precious metals primarily through correlation, as heightened institutional uncertainty tends to lift demand for assets perceived as stores of value, even in the absence of immediate policy changes.

Safe-haven demand has been further underpinned by a series of geopolitical flashpoints. President Donald Trump’s capture of Venezuela’s leader, renewed rhetoric over Greenland, and violent protests in Iran that carry the risk of regime instability have all contributed to a tense global backdrop. These events do not directly disrupt precious metals supply, but they elevate risk perception across markets, strengthening the appeal of gold and silver through association with geopolitical stress.

Bullish Forecast Revisions From Analysts

Reflecting these dynamics, Citigroup analysts raised their three-month forecasts for gold and silver to $5,000 per ounce and $100 per ounce, respectively. Such revisions highlight growing confidence that macroeconomic conditions and political uncertainty will remain supportive in the near term. While forecasts do not drive prices mechanically, they can reinforce market sentiment by shaping expectations and positioning behavior.

As of mid-morning trading in Singapore, spot gold rose 0.6% to $4,616.28 an ounce, while silver added 2.4% to $88.9830 after paring some earlier gains. Platinum and palladium also advanced, pointing to broader strength across the precious metals complex. Meanwhile, the Bloomberg Dollar Spot Index was flat after a modest rise the previous session, offering little resistance to bullion prices. A stable dollar environment removes a common headwind for metals, allowing inflation expectations and risk sentiment to play a more prominent role.

Overall, the surge in silver and renewed strength in gold reflect a convergence of softer inflation data, political uncertainty, and persistent geopolitical tension. While some of the recent inflation weakness may prove temporary, the broader environment continues to favor precious metals as both a hedge against policy risk and a beneficiary of shifting rate expectations.

Source: Bloomberg

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King Ten

Remarks of Officials

Data Interpretation

Economic

The global economy is showing unexpected resilience but is on track for its slowest decade of growth since the 1960s, according to the World Bank's latest Global Economic Prospects report. While the worldwide outlook remains subdued, the UAE economy is projected to expand by 5% in 2026 and accelerate to 5.1% in 2027.

Global growth is forecast to hold steady, easing to 2.6% in 2026 before rising to 2.7% in 2027. This represents a slight upgrade from previous projections, driven primarily by stronger-than-expected performance from the United States, which accounts for two-thirds of the upward revision.

A Tale of Two Trajectories: Advanced vs. Developing Economies

Despite the overall resilience, the report highlights a widening gap in living standards. By the end of 2025, nearly all advanced economies are expected to see per capita incomes surpass 2019 levels. In stark contrast, about one in four developing economies will remain below their pre-pandemic income benchmarks.

"With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty," noted Indermit Gill, Chief Economist of the World Bank Group.

For developing economies, growth is projected to slow from 4.2% in 2025 to 4% in 2026, before picking up to 4.1% in 2027. Per capita income growth in these nations is forecast at 3% in 2026, a full percentage point below the average from 2000–2019. At this rate, their per capita income is only expected to reach 12% of the level seen in advanced economies.

Low-income countries are forecast to grow at a faster clip, averaging 5.6% over 2026–2027, but this pace is insufficient to close the income gap. These trends amplify the challenge of creating jobs for the 1.2 billion young people expected to enter the workforce in developing economies over the next decade.

Regional Outlook: Middle East Shows Promise

Growth prospects in the Middle East are more optimistic. The World Bank projects that Gulf Cooperation Council (GCC) states will see economic growth accelerate to 4.4% in 2026 and 4.6% in 2027. For the wider Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, growth is expected to hit 3.6% in 2026 and rise further to 3.9% in 2027.

The global economy in 2025 was buoyed by a surge in trade and rapid adjustments in supply chains. As these effects fade, softening domestic demand is expected in 2026. However, easing global financial conditions and a projected decline in global inflation to 2.6% should provide a cushion against the slowdown.

The Urgent Need for Fiscal Reform

The report emphasizes that overcoming these challenges requires a comprehensive policy response from developing economies. The World Bank outlines a three-pillar strategy:

• Strengthening Capital: Bolster physical, digital, and human capital to boost productivity.

• Improving Business Environment: Enhance policy credibility and regulatory certainty to encourage business expansion.

• Mobilizing Private Capital: Attract private investment on a large scale.

A critical focus is the need to restore fiscal sustainability, which has been weakened by successive shocks, rising debt-servicing costs, and growing development needs.

"With public debt in emerging and developing economies at its highest level in more than half a century, restoring fiscal credibility has become an urgent priority," said M. Ayhan Kose, Deputy Chief Economist at the World Bank. He added that well-designed fiscal rules can help stabilize debt and build resilience, but their success hinges on credibility, enforcement, and political commitment.

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Devin

Data Interpretation

Commodity

Remarks of Officials

Economic

Energy

China–U.S. Trade War

China's demand for key global commodities diverged sharply last year, with coal imports posting their steepest decline in a decade while crude oil, iron ore, and soybeans surged to new highs.

Customs data from 2025 reveals a complex picture of the nation's economic priorities. While soaring imports of raw materials signal a push for industrial production and strategic stockpiling, falling purchases of coal and natural gas reflect a surge in domestic output and the growing impact of clean energy alternatives.

Coal and Gas Imports Face Headwinds

Coal purchases experienced their most significant drop in ten years, falling 9.6% from the previous year's record to 490 million tons. This marks the first annual decline since 2022. The downturn was driven by a combination of factors, including rising local coal production that pushed domestic prices to four-year lows and a rapid expansion of renewable energy that curbed demand for thermal power. Further pressure on shipments is expected in 2026, as Indonesia—China's largest foreign supplier—plans to cut its own coal output.

Natural gas imports also fell for the first time in three years, slipping 2.8% to 128 million tons. This decrease was a response to record-high domestic gas production and softer industrial demand. However, the outlook for gas in 2026 appears more positive. China National Petroleum Corp. forecasts that consumption growth will double to 5% this year. A wave of new global export projects is also likely to lower prices, potentially boosting demand for seaborne liquefied natural gas (LNG).

Oil and Copper Tell a More Complex Story

Crude oil bucked the trend seen in other fossil fuels. Purchases rose 4.4% to 578 million tons, reversing a decline from 2024. The increase was largely due to strategic stockpiling, which helped offset a sharp drop in fuel demand caused by the ongoing energy transition. A global oil glut could further encourage Beijing to maintain high import levels as a buffer against potential sanctions or supply disruptions.

The copper market showed a notable shift in demand. Imports of unwrought copper and related products fell 6.4% to 5.3 million tons, the lowest level this decade, weighed down by high prices and a slowing economy. However, this was counterbalanced by a record-breaking surge in purchases of copper ore and concentrate, which climbed 7.9% to 30 million tons. This highlights China's expanding domestic smelting capacity, as the country increasingly prefers to import raw materials rather than finished metal.

Iron Ore and Soybeans Hit All-Time Highs

Despite weakness in the domestic steel market, iron ore imports rose for a third consecutive year, increasing 1.8% to an all-time high of 1.26 billion tons. However, stockpiles of iron ore have grown in recent months, and potential headwinds are emerging. Beijing's latest efforts to curb record steel exports in the face of rising global protectionism could dampen the market this year.

Soybean imports also set a new record for the third year in a row, rising 6.5% to 112 million tons. Chinese crushers relied heavily on Brazilian shipments early in 2025 before increasing purchases from the United States following a trade agreement made with the Trump administration in October. Under the deal, Chinese buyers are committed to purchasing 25 million tons of U.S. soybeans annually through 2028. The future size and origin of China's soybean imports will largely depend on the endurance of this trade truce.

Broader Trade and Market Context

Overall, China's trade surplus climbed to $1.2 trillion in 2025, continuing a record-setting run as overseas shipments grew more strongly than expected toward the end of the year.

Looking ahead, several factors could influence trade dynamics. China may propose easing restrictions on Canadian rapeseed products if Prime Minister Mark Carney's government relaxes tariffs on Chinese-made electric vehicles during an upcoming visit. In the energy markets, a forecast for frigid weather in Northeast China, coinciding with a cold spell in Europe, threatens to drive up prices for liquefied natural gas as competition among buyers intensifies.

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Gerik

Political

Public Call For Continued Protests

President Donald Trump openly encouraged Iranians to sustain and expand protests against the government of Supreme Leader Ayatollah Ali Khamenei. Speaking at a rally in Detroit, Trump called on demonstrators to keep protesting and, if possible, take over institutions, while urging activists to document those involved in suppressing the unrest. He warned that those responsible would “pay a very big price,” framing the protests as a defining challenge to Iran’s leadership.

In remarks before boarding Air Force One, Trump said future U.S. action would depend on updated casualty figures, which he expected to receive following a National Security Council meeting chaired by Vice President JD Vance. Trump suggested decisions could be made rapidly once those numbers were confirmed, stating he would “act accordingly.” This messaging introduced uncertainty into diplomatic and security calculations, as it linked potential U.S. responses to evolving developments on the ground rather than a clearly defined policy threshold.

Rising Death Toll And Human Rights Warnings

According to the U.S.-based Human Rights Activists News Agency, at least 2,000 people have been killed during the unrest, marking the deadliest wave of protests in decades and the most serious threat to Khamenei’s rule since the Islamic Republic was established in 1979. The Oslo-based Iran Human Rights group warned that the risk of mass and extrajudicial executions was extremely serious, underscoring international concern over the scale and severity of the crackdown.

Trump’s comments revived speculation about further U.S. military strikes. A White House official said earlier that Trump had been briefed on a range of options, including strikes on non-military sites. The region has been on heightened alert following recent U.S. actions, including the capture of Venezuelan President Nicolas Maduro less than two weeks ago and strikes on Iran’s nuclear facilities seven months earlier. Trump has also approved military operations in Somalia, Yemen, Syria, Nigeria, and the Caribbean Sea, reinforcing perceptions that force remains a readily available policy instrument.

Defining Success Through Past Interventions

In an interview with CBS News, Trump described his objective as winning and pointed to previous operations as benchmarks of success. He cited the killing of Islamic State leader Abu Bakr al-Baghdadi, Iranian military officer Qasem Soleimani, the Venezuela operation, and strikes on Iran’s nuclear infrastructure, which he said neutralized the threat in about 15 minutes. These references framed his Iran policy within a broader narrative of decisive action rather than prolonged negotiation.

Alongside military rhetoric, Trump reiterated economic pressure, referencing his announcement that the U.S. would impose a 25% tariff on any country doing business with Iran. He also said he had canceled all meetings with Iranian officials until the killing of protesters stops, reversing earlier comments that Tehran had reached out to seek talks. The combination of sanctions threats and suspended diplomacy has reinforced uncertainty around the future of U.S.–Iran engagement.

Technology And Information Access

Elon Musk’s SpaceX began offering free Starlink satellite service in Iran amid an internet blackout imposed by Iranian authorities. The move mirrors similar actions taken during Russia’s invasion of Ukraine and after the recent U.S. operation in Venezuela. Expanded access to satellite internet may influence how information flows during the protests, though its broader impact remains uncertain.

Iran’s unrest, initially sparked by a currency crisis and worsening economic conditions, has evolved into direct challenges to the regime itself. Trump described the country as fragile and invoked the slogan “make Iran great again,” portraying the protests as a historic moment. As political pressure, economic measures, and military signaling converge, the situation remains volatile, with markets and governments closely watching whether rhetoric translates into further action or remains a tool of pressure amid a rapidly changing crisis.

Source: Bloomberg

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Gerik

Economic

Inflation Data Viewed As Constructive But Not Conclusive

Richmond Federal Reserve President Tom Barkin said December’s inflation figures offered a positive signal, even as he cautioned against drawing firm conclusions too quickly. Government data released on Tuesday showed consumer prices rose 2.7% from a year earlier, a result Barkin described as encouraging because it did not show the rebound some policymakers and investors had anticipated. At the same time, he emphasized that inflation often exhibits seasonal strength at the start of the year, making the next few months critical for confirming whether price pressures remain contained.

Speaking to the CFA Society in Washington, Barkin characterized the current policy environment as a delicate balance. Inflation remains above the Federal Reserve’s target, but he noted it does not appear to be accelerating. Meanwhile, unemployment is not deteriorating sharply, even though risks on both sides remain. Barkin highlighted the dual concern facing policymakers, as entrenched inflation expectations could complicate policy if they take hold, while an overly restrictive stance could further weaken the labor market. He suggested that it is plausible neither outcome materializes, underscoring the uncertainty embedded in current conditions.

Policy Context After Last Year’s Rate Cuts

The Federal Reserve cut its policy rate by a total of 75 basis points in 2025 and signaled in December that it may pause in the new year to reassess economic conditions. Barkin’s comments align with that stance, indicating no urgency to respond to recent data. He stressed that monetary policy operates with long lags, often affecting the economy around 12 months after changes are made. This timing dynamic creates space for policymakers to observe trends rather than react to individual data points, reinforcing a measured approach rather than rapid recalibration.

Recent labor market data adds nuance to the inflation outlook. The Labor Department reported that the unemployment rate stood at 4.4% in December, down slightly from the previous reading but higher than a year earlier. Barkin did not indicate that these figures warranted immediate policy action. Instead, he framed them as part of a broader picture in which employment conditions are softening gradually rather than collapsing, a pattern that supports patience rather than intervention.

Inflation Target And Measurement Nuances

While December’s consumer price index reading stood at 2.7% year on year, Barkin noted that the Federal Reserve targets 2% inflation using a different measure, the personal consumption expenditures price index. That gauge will be updated after additional data, including producer prices, are released in the coming days. This distinction highlights the importance of measurement methodology in policy assessment, as CPI movements do not translate directly into the Fed’s preferred target metric.

Barkin emphasized that no single policy meeting is decisive, reflecting the Fed’s capacity to adjust over time. He noted that policymakers can afford to get a decision wrong at one meeting because future meetings provide opportunities to recalibrate. This perspective underscores an institutional preference for gradualism, particularly when economic signals are mixed and policy impacts unfold slowly.

Central Bank Independence And Institutional Stability

Barkin declined to comment directly on recent news surrounding potential legal action against Fed Chair Jerome Powell, but he underscored a broader principle by stating that countries with independent central banks tend to achieve better economic outcomes. The remark reinforces the view that institutional credibility and autonomy play a stabilizing role in managing inflation and employment, even as political pressures intensify.

Overall, Barkin’s remarks suggest cautious optimism within the Federal Reserve. December’s inflation data provides reassurance that price pressures are not accelerating, but seasonal patterns, measurement differences, and labor market uncertainties argue for patience. The Fed’s posture remains one of careful observation, with policy decisions guided by accumulated evidence rather than short-term fluctuations.