Silver Pressured as Fed Hike Expectations Rise Amid Strong Demand Concerns

Silver prices declined by 0.38% on Tuesday to around $65.85 as investors strengthened their expectations of further interest rate hikes by the Federal Reserve.

The white metal remains under pressure due to concerns that inflation is being driven not only by elevated energy prices but also by strong domestic demand, according to Chicago Fed President Austan Goolsbee and Minneapolis Fed President Neel Kashkari.

Austan Goolsbee said on Monday that robust demand could be contributing to inflation alongside energy prices, tariffs, and other supply shocks, which is a concern for the monetary policy outlook.

The CME FedWatch tool shows an almost 90% chance that the Fed will deliver at least one additional interest rate hike this year, which represents a headwind for Silver as it does not offer any yield and tends to lose appeal when interest rates and bond yields rise.