The "Silver Wind" concussion is ready to rebound! Investment bank: the average silver price will reach $31

The US PCE price index is in line with market expectations, suspending the Fed's expectation of early tightening of monetary policy. Federal Reserve Chairman Colin Powell again supported the dovish argument, with the dollar and US bonds weakening under pressure. Silver is up slightly and is stabilizing at $26.12 in preparation for a rebound. Greeting today's light calendar in early trading in Asia, the market is expected to continue to digest and interpret US PCE inflation data and focus on the latest views and trends of the Federal Reserve.

The (PCE) price index of personal consumption expenditure in the United States rose at an annual rate of 3.9% in May, in line with expectations, according to data released by the U.S. Department of Commerce on Friday local time. The US core PCE price index rose 3.4 per cent in May from a year earlier, the largest year-on-year increase since April 1992, but the increase was also in line with previous expectations. The US core PCE price index rose at a monthly rate of 0.5 per cent in May, compared with an expected rise of 0.6 per cent; real personal consumption fell 0.4 per cent in May and was revised upwards to 0.3 per cent in April.

During a congressional hearing last week, Federal Reserve Chairman Colin Powell reiterated that although the impact and duration of inflation was longer than the Fed expected, he stressed the temporary nature of inflation, saying that prices would fall after the economy normalized. And US Treasury Secretary Yellen also said that after months of city closure measures to curb the spread of the virus, the process of economic restart continues to be a bumpy road. When the senator asked Yellen if she thought prices would remain at the 5 per cent annual rate last month, she said inflation would fall back to nearly 2 per cent by the end of this year or early next year.

In addition, Yellen also mentioned that most indicators of inflation expectations after next year will return to close to 2%, which is the Fed's target level. Echoing Powell's speech at the hearing, Yellen also attributed recent price pressures to supply chain bottlenecks and shortages in the spring. these problems are expected to be resolved in the coming months, and the forces to curb inflation for more than a decade will lead the current high inflation lower.

Rosengren (Eric Rosengren), president of the Federal Reserve Bank of Boston, said that the US economy is likely to meet the conditions for maximizing employment and inflation, raising interest rates as early as the end of next year, but it is important to pay attention to the data.

As of 08:18 Hong Kong time before the deadline, silver fell 0.09 per cent to $26.09, gold fell 0.03 per cent to $1781.11, the dollar index fell slightly to 91.793, and the yield on the 10-year Treasury note fell 0.66 per cent to 1.526.

(CIBC), the Canadian Imperial Commercial Bank, estimates that the average gold price will be $1925 an ounce this year and $2100 an ounce in 2022. The bank also expects the average silver price to be $28 an ounce this year and $31 an ounce next year. Physical demand for gold and silver will remain strong, and not just from traditional investors, the report said. As financial markets become more volatile, many investors will choose gold and silver in search of safe-haven assets.

MoneyDJ quoted the report as saying that while inflationary pressures may force the Fed to tighten policy, investors should focus more on real interest rates, which will remain negative. The report said that the environment of negative real interest rates will support gold prices in the next few years, and gold prices still have room for performance until real interest rates clearly recover.

The report also believes that the Fed will maintain a good balance between controlling inflation and supporting the economy, which is expected to lead to further gains in gold and silver prices in the coming quarters.

Apart from benefiting from the low interest rate environment as well as gold, the global economic recovery has led to industrial demand and has become an important pillar supporting silver prices in the next two years, including silver demand in solar and green energy industries, which is expected to achieve significant growth. Physical demand in the silver market is expected to be in short supply in 2022 and 2023, and the supply shortage in the silver market is likely to expand if investment demand increases.