Silver Surges to 7-Week High Amid Strong Demand

Silver prices surged to a seven-week high on Wednesday in European trading, as strong demand for precious metals and a weaker US dollar helped drive up prices. The metal jumped 3.25% to $66.80, its highest level since June 22.

The gains were also supported by easing oil prices, which fell more than 0.5% on Wednesday amid correction and profit-taking activity. Global markets were boosted by reports suggesting that Iran and Oman are nearing a final agreement over the Strait of Hormuz.

Key US inflation data for July is due later today, and will provide crucial clues about the likelihood of the Federal Reserve raising interest rates during the remainder of this year. If US inflation data comes in below market expectations, the probability of a Federal Reserve rate hike this year will decline, potentially driving silver prices higher.

Markets currently price a 52% probability that the Federal Reserve will leave interest rates unchanged at its September meeting, compared with a 48% probability of a 25-basis-point rate hike. For December, markets currently price a 24% probability of no change in interest rates and a 76% probability of a 25-basis-point rate hike.