Silver Extends Downturn

Silver climbed more than 1% to $52.7 an ounce on Monday, supported by lower oil prices that eased inflation concerns, as investors awaited US CPI and PPI data due later this week for further clues on the Federal Reserve’s monetary policy outlook. The advance follows a 6% rally last week, after Democrats won control of both chambers of Congress in the US midterm elections, raising hopes for a potential end to the US-Israeli war with Iran. Oil prices fell sharply on Monday after US President Donald Trump downplayed the likelihood of further strikes against Iran. These gains came despite a stronger-than-expected US employment report released on Friday, which reinforced expectations that the Federal Reserve could keep interest rates higher for longer, supporting the US dollar and Treasury yields. Markets currently assign an 81% probability to a Fed rate hike in December, according to the CME FedWatch Tool.

Silver climbed above $53 per ounce on Monday, extending last week’s gains as weaker oil prices eased inflationary pressures, although expectations of a more hawkish Federal Reserve capped further upside. Oil prices remained under pressure after President Donald Trump said it was “highly unlikely” he would authorize additional strikes on Iran if negotiations over its nuclear program and the reopening of the Strait of Hormuz make significant progress. Meanwhile, US data released on Friday showed that job growth accelerated in October, while the unemployment rate declined to 4.1%, highlighting the resilience of the labor market and strengthening expectations of a potential Fed rate hike in December. Markets are now pricing in an approximately 81% probability of a quarter-point rate increase before year-end, up from 71% ahead of the employment report. Investors are now turning their attention to key US inflation data due this week for further clues on the Fed’s monetary policy direction.

Silver prices traded just below $52 an ounce on Friday as the US dollar strengthened following a stronger-than-expected nonfarm payrolls report, fueling expectations that the Federal Reserve could raise interest rates at its policy meeting next month. The US economy added 165,000 jobs in October, comfortably above market expectations of 65,000, while the unemployment rate unexpectedly eased to 4.1%. Employment figures for the previous two months were also revised upward by a combined 84,000. Further reinforcing the hawkish outlook, average hourly earnings increased by 0.4%, exceeding forecasts of 0.3%, while renewed gains in crude oil prices added to inflationary concerns. Silver was up more than 6% this week supported by broader safe-haven demand following a sweeping Democratic victory in the US midterm elections, which prompted investors to rotate out of AI stocks and seek defensive assets.