Silver Prices Extend Rally Above $17.00 as Risk Aversion Lingers

New York (Aug 10)  Silver prices climbed to fresh two-month highs on Thursday amid a bout of risk aversion that was triggered by North Korea tensions.

Silver for September delivery surged 24 cents, or 1.4%, to $17.10 a troy ounce at 7:48 a.m. ET. That puts the grey metal on track for its highest settlement in two months. Prices were trading at session highs in the early morning after establishing a session low of $16.85.

Gold futures traded at more than two-month highs on Thursday. The December futures contract rallied $7.10, or 0.6%, to $1,286.40 a troy ounce.

Gold’s premium over silver has plummeted this week to 73.78. Gold’s premium rose to a multi-year high of 76.63 last month.

Precious metals caught a tailwind Wednesday after a war of words between the United States and North Korea drove investors into the safety of traditional haven assets. Risk aversion triggered a large drop in Asian and European equities, with Wall Street soon following.

The U.S. dollar index (DXY) climbed 0.2% Thursday morning to trade at 93.72. The DXY basket was held in check earlier by a resurgent yen, which is widely regarded as a regional haven currency.

In monetary policy news, the Reserve Bank of New Zealand (RBNZ) agreed on Thursday to keep its benchmark interest rate at a record low of 1.75%. The central bank acknowledged that “monetary policy will accommodative for a considerable period” amid a weak inflation outlook.

Reserve Bank Governor Graeme Wheeler said that a lower New Zealand dollar is needed to boost trade-related inflation and deliver more sustained growth.

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