Silver Sees Fresh Gains Amid Waning Rate Hike Expectations

Silver prices have regained ground above $64 as expectations of interest rate hikes from the Federal Reserve (Fed) continue to fade. The precious metal gained 0.37% on Friday, trading around $64.70 at the time of writing.

This shift in market sentiment is largely driven by slowing US inflation rates, which have reduced expectations of further monetary tightening. The Producer Price Index (PPI) slowed to 4.7% year-over-year, while the Core PPI came in at 4.2%. These figures, combined with the Consumer Price Index (CPI) data released on Wednesday, are helping to reduce expectations of an interest rate hike at the September meeting.

According to the CME FedWatch tool, markets now see around a 35% chance of an interest rate hike at the September meeting, down from 40% immediately after the PPI release and from a significantly higher level at the end of July. This shift supports Silver as lower interest rates reduce the opportunity cost of holding non-yielding assets.