Silver Prices Rebound on Dovish Fed Comments and Declining Rate Hike Odds

Silver prices recovered sharply after dovish comments from Fed officials eased pressure on the metal. The white metal had slumped nearly 10% to $63.31 on September 2 due to hawkish remarks by Fed Chair Powell at the Jackson Hole Symposium, but rebounded with a daily gain of 2.70% to $67.09.

New York Fed President John Williams stated that inflation continues to trend down as the impact of tariffs fades, identifying tariffs and energy as the two biggest sources of inflation. He suggested a 'wait-and-see' approach is appropriate as inflation expectations remain anchored.

Fed Governor Waller also chimed in, saying his decision on rates will be heavily influenced by upcoming CPI inflation data on September 9, and he is willing to hold rates steady should inflation show a downtrend. The US Dollar Index was hit severely due to dovish Fedspeak, dropping nearly 0.90% in the last two days.

With the probability of the Fed hiking rate at its September 16 meeting declining to 50%, traders are paring back their rate hike bets. The metal may not fall much unless the nonfarm payroll report turns out to be a blowout or crude oil prices surge violently, making dips towards $65 short-term buying opportunities for a target of $70+.