Fed Hawkishness and Geopolitics Weigh on Silver Price
The August Nonfarm Payrolls report showed a significant beat, with a rise of 162,000 jobs, far exceeding the forecasted 56,000. The unemployment rate remained steady at 4.1%, while annual wage growth slowed to 3.1%. These figures led traders to price in tighter monetary policy, with a 58.3% probability of a 25-basis-point Fed rate increase in September according to the CME FedWatch tool.
The Federal Reserve's Hammack delivered a notably more hawkish message, scoring a 9.2/10 on the FXS Speechtracker, well above the historical average of 7.6/10. This rhetoric signaled a shift toward tighter policy and challenged market expectations for an imminent pivot. The stronger Dollar narrative gained traction as markets repriced the path of policy.
Rising crude oil prices due to geopolitical tensions between the US and Iran added to Silver's headwinds, sparking fears of rekindled inflationary pressures. The conflict intensified after the US targeted three Iranian tankers in response to missile attacks on its warships.