Silver Price Slumps on Fed Hike Bets and Oil Price Surge

The Silver price (XAG/USD) has fallen to around $63.50 per troy ounce amid rising Federal Reserve rate-hike expectations and higher oil prices.

This decline follows hotter US inflation reports, which have intensified pressure on the central bank to tighten monetary policy further.

The US Consumer Price Index (CPI) rose 0.4% month-on-month in August, pushing the 12-month increase to 3.4%, while core CPI increased by 0.3% monthly, outpacing the prior and forecasted 0.2% gains.

Rabobank analysts highlight that oil prices are rising again due to a prolonged Middle East crisis, which has kept oil prices elevated and delivered an inflationary shock to the global economy.