Silver Strengthens on Warsh Remarks

Silver strengthened above $59 an ounce on Thursday after hitting seven-month lows in recent sessions, as Federal Reserve Chair Kevin Warsh said inflation expectations had eased over the past month, suggesting there was no urgency to raise interest rates. However, he reiterated the central bank’s commitment to restoring price stability. Data released on Wednesday also showed private-sector hiring in the US slowed more than expected last month, while investors now await the nonfarm payrolls report later today for fresh insights into labor market conditions and the Fed’s policy outlook. Markets continue to price in more than a 60% chance of a Fed rate hike in September. Silver also drew support from rising oil shipments through the Strait of Hormuz and signs of progress in indirect US-Iran talks, which pushed oil prices lower and eased inflation concerns.

Silver climbed 3% to $60 per ounce on Wednesday, rebounding from a seven-month low as investors weighed remarks from new Federal Reserve Chair Kevin Warsh while renewed US-Iran tensions fueled concerns over stability in the Middle East. Speaking at the ECB’s annual forum in Sintra, Portugal, Warsh said inflation risks and expectations had moderated in recent weeks but reaffirmed the Federal Reserve’s commitment to bringing inflation back to its 2% target. He also confirmed the Fed’s decision to move away from traditional forward guidance on interest rates, signaling a shift in the central bank’s communication strategy. Despite the change in communication, investors continued to price in further US interest-rate hikes this year as policymakers seek to contain inflation against the backdrop of a resilient labor market. Meanwhile, markets closely followed developments in US-Iran peace talks in Qatar, although direct negotiations between the two countries remained unlikely.

Silver fell below $58 an ounce on Wednesday, sliding toward its lowest level in seven months as strong US economic data underscored the economy’s resilience and reinforced expectations that the Federal Reserve will raise interest rates this year. The latest JOLTS report showed job openings climbed to a two-year high, while analysts expect another solid increase in June non-farm payrolls. Meanwhile, recent core inflation readings remained well above the Fed’s 2% target. Markets are now pricing in at least one Fed rate hike this year, with the first potentially coming as early as September. Investors also awaited updates from the ongoing US-Iran peace talks in Qatar amid hopes for a lasting ceasefire agreement, although the two sides were not expected to hold direct talks.