Silver Prices Surge as North Korea Tensions Spark Haven Demand

Silver values rose on Wednesday, as haven buying drove precious metals higher amid escalating tensions on the Korean peninsula.

The September futures contract rose 27 cents, or 1.6%, to $16.66 a troy ounce at 7:45 a.m. ET. The grey metal was hovering near session highs, having established little downside during overnight trade.

Gold also mounted a comeback Wednesday after a rocky start to the week. December gold, the most actively traded futures contract, rose $12.10, or 1% to $1,274.70 a troy ounce.

North Korea is reportedly examining plans for a missile strike on the U.S. Pacific territory of Guam after President Donald Trump warned Pyongyang he would respond with “fire and fury” to any threat from the hermit state. The comments reverberated throughout the financial markets, sending Asian stocks lower in early Wednesday trading. Asian markets would finish sharply lower, with Japan’s Nikkei 225 plunging 1.3%.

Tensions concerning North Korea also weighed on U.S. stock futures, which traded lower in pre-market activity. The Dow Jones Industrial Average declined on Tuesday for the first time in 11 sessions.

The Japanese yen also rose on haven buying, which put downward pressure on the U.S. dollar index (DXY). The DXY basket was last seen trading at 93.60, where it was little changed.

In economic data, Chinese consumer inflation weakened unexpectedly last month, while producer prices held steady. The July consumer price index (CPI) declined to 1.4% compared to a year ago, following a reading of 1.5% the previous month, the National Bureau of Statistics reported Wednesday. Analysts had forecast no change from the previous month.

Producer inflation, which has been a major driver of Chinese growth in recent quarters, rose 5.5% annually in July.

Comex Silver Futures (September 2017)

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Sam Bourgi is a financial market analyst for economiccalendar.com. He has more than six years of progressive experience in economic and financial analysis, research consulting and sectoral analysis. As a published author in government, peer-reviewed, online and industry sources, he has developed a fundamental approach to the financial markets with a broad focus on stock indices, commodities and the technology sector. He earned his Bachelor’s Degree from the University of Windsor and Master’s degree from McMaster University.