Silver Prices Jump As Inflation Heats Up – What’s Next?

Silver prices jumped to the highest in a month as traders sought haven amid rapidly surging inflation.

U.S Producer Price Inflation surged to 8.6% in September – its biggest year-over-year advance since November 2010.

Traders pay very close attention to the PPI data as a gauge for inflation at the wholesale level. It is seen as a leading indicator because producers pass on higher prices to their customers.

Elsewhere, the U.S Consumer Price Index accelerated to 5.4% from a year ago – its highest level in 13 years.

Signs of inflation are growing more obvious day by day, from soaring shipping costs, rising energy prices, food and general commodity costs to shortages of products and labour.

The Federal Reserve also keeps a close eye on inflation pressures as they try to gauge whether inflation will be transitory or not.

So far this year, Fed officials have dismissed surging inflation as being only ‘temporary’. However traders are unconvinced and believe that the Fed has lost control over inflation.

Higher inflation, ultimately erodes consumers’ purchasing power, making assets such as precious metals an attractive haven as we are currently seeing.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

For a look at all of today’s economic events, check out our economic calendar.