Silver Pulls Back Ahead of Producer Inflation Data Release

Silver prices have pulled back to around $64.90 as investors exercise caution ahead of the US producer inflation data release on Thursday. Despite the drop, the white metal remains supported by easing expectations for tighter monetary policy from the Federal Reserve.

The latest Consumer Price Index (CPI) figures show a slowdown in price pressures, with headline CPI easing to 3.4% YoY in July from 3.5% in June. Core CPI also decreased to 2.5%, meeting market expectations.

This data reduces the need for the Fed to raise interest rates quickly. Markets now assign a 38% chance of a rate hike in September, down from 54% a week earlier. This shift in monetary policy outlook is weighing on short-term US Treasury yields, which typically benefits non-yielding assets like Silver.

The upcoming producer price data release will be closely watched for signs of easing inflationary pressures, potentially reinforcing expectations that the Fed will keep rates unchanged and supporting Silver.