Silver Prices Recover on Dovish Fed Commentary

The silver market has seen a significant recovery after a dovish Federal Reserve eases pressure on prices. According to Mirae Asset Sharekhan, high China inventories and subdued LBMA lease rates remain concerns for the metal. Despite this, spot silver is trading at $67.09, up 2.70% from its previous day's close.

The Fed's dovish commentary has led to a decline in the probability of rate hikes at the September 16 meeting. Traders have pared back their rate hike bets, with the probability now at a coin toss (50%) from 65% seen earlier. This easing of pressure on silver prices is attributed to speeches by Fed officials John Williams and Waller.

Williams stated that there is evidence inflation continues to trend down as the impact of tariffs fades. He added that the neutral rate is around 1% and that investment in AI and growth expectations are behind hardening bond yields. Waller said that his decision on rates will be heavily influenced by the upcoming CPI inflation data on September 9.

The US Dollar Index has also declined due to dovish Fedspeak, hitting a low of 98.98. Yields have eased as traders pare back their rate hike bets. Two-year yields are down 0.90% for the day, and ten-year yields have softened by 0.75%.

Looking ahead, Mirae Asset Sharekhan sees support at $65 for silver prices. The metal may not fall much in the near term unless nonfarm payroll report turns out to be a blowout report or crude oil prices surge violently. In this scenario, dips towards $65 could be used as short-term buying opportunities.