Silver Stalls at $66 as Inflation Fears and Rate Hike Bets Collide
Silver prices have stabilized around $66 an ounce as investors weigh expectations of a Federal Reserve rate hike against a weaker dollar ahead of key US inflation data.
The metal's price has been cautious in its movement, reflecting investors' uncertainty about the economic outlook. Rising oil prices have renewed concerns over inflation, with oil extending gains to multi-week highs amid escalating Middle East tensions after Yemen's Iran-backed Houthis attacked energy facilities and cities in Saudi Arabia.
A stronger-than-expected jobs report last Friday has pointed to a strengthening labor market, prompting traders to price in roughly a 60% chance of a Fed rate hike at the September meeting. However, this could potentially reduce the appeal of silver as an inflation hedge since higher interest rates tend to diminish the non-yielding asset's attractiveness.
Investors are now waiting for producer price data on Thursday and consumer inflation figures on Friday for further clues on the Fed's policy outlook.