Oil Price Slump Lifts Silver Amid Fed Rate Hike Worries

Silver prices rebounded on Thursday as oil prices softened, easing inflationary pressures. The recent rally in oil prices had put upward pressure on silver, but the latest developments suggest that this trend may be reversing.

A major factor behind the decline in oil prices is the progress being made to restore pipeline capacity in Saudi Arabia. Reports indicate that around half of East-West pipeline capacity will be restored within days, with full operation expected in six weeks. The increase in oil supply should help to ease inflationary pressures, which have been a major concern for investors.

However, despite the positive developments in the oil market, silver prices remain under pressure due to the recent interest rate hike by the US Federal Reserve. The Fed increased the fed funds rate by 25 basis points to 3.75%-4%, marking its first rate increase in three years. Inflation remains elevated, with core US inflation rising more than anticipated in August.