Oil Price Surge Weighs on Silver as Fed Hike Expectations Rise
Silver prices have rebounded from their sharp losses on Thursday, but remain under pressure due to changing expectations around US monetary policy.
The precious metal is currently trading at around $57.60 per troy ounce during Asian trading hours, a modest recovery after falling over 4% in the previous session.
The rise in oil prices linked to rising tensions in the Middle East has strengthened market expectations for potential Federal Reserve rate hikes, which could weigh on silver as it does not provide a yield and becomes less attractive when interest rates rise.
According to the CME FedWatch tool, money markets are pricing in an estimated 35.8% probability of a Federal Reserve rate hike this month and an 82.1% probability of at least a quarter-point rate hike in September.