Silver Prices Rebound Ahead of CPI Report Amid High Probability of Rate Hike
Silver prices rebounded sharply on Friday, rising 1.3% to $64.396 per troy ounce as traders bought the dip ahead of the US August Consumer Price Index report.
The metal had fallen to an intraday low of $62.9965 earlier in the day, its weakest level in over three weeks, but bounced back after producer prices accelerated in August due to higher energy costs from the Iran conflict.
Markets have priced in a 71% probability of a 25-basis-point Fed rate increase next week, which could limit silver's upside potential. However, the metal tends to rise with lower interest rates and a weaker US dollar, making it a safe-haven asset in times of uncertainty.
The Silver Institute has confirmed a fifth consecutive annual supply deficit through 2025, providing long-term support for the metal. The Fed's September 16 rate decision and accompanying guidance will remain key variables for precious metals in the near term.