Silver Rallies as Weak Jobs Data Cuts Fed Hike Odds

Silver prices climbed above $61 per ounce on Thursday, recovering from seven-month lows, as markets reduced bets on Federal Reserve rate hikes after disappointing US jobs data. The economy added just 57,000 jobs in June, the lowest in four months and far below the 110,000 forecast, with leisure and hospitality losing 61,000 jobs despite World Cup tourism. The unemployment rate unexpectedly dropped to 4.2% as workers exited the labor force, while wage growth ticked up to 3.5% year-over-year. Fed funds futures now show less than a 50% chance of a September hike, down from 67% before the report. On Wednesday, Fed Chair Kevin Warsh acknowledged easing inflation expectations but reiterated the Fed’s focus on price stability. Silver also drew support from rising oil shipments through the Strait of Hormuz and progress in indirect US-Iran talks, which lowered oil prices and further eased inflation pressures.

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.