Silver Soars as Tame US Inflation Reduces Rate Hike Bets

Silver prices rose to around $66 an ounce on Thursday, reaching near-seven-week highs as US consumer inflation data came in lower than expected. The slowdown in inflation, which slowed for a second consecutive month to 3.4% in July, has reduced pressure on the Federal Reserve to raise interest rates in the near term.

Investors are now looking ahead to producer inflation data due later in the global day for further clues on price pressures. With markets seeing around a 40% chance of a 25 basis point rate hike from the Fed in September, down from nearly 50% a day earlier, precious metals such as silver have drawn support.

A pullback in oil prices has also contributed to the rise in silver prices as investors assess the prospects of a deal to reopen the Strait of Hormuz. However, escalating rhetoric between the US and Iran amid deadlocked negotiations has reduced the likelihood of an imminent agreement.