Silver Declines on Renewed US-Iran Strikes

Silver fell below $69 an ounce on Friday, paring gains from the previous session as investors cautiously awaited Federal Reserve Chair Kevin Warsh’s speech at the annual Jackson Hole symposium later in the global day for clues about the outlook for US interest rates. Markets are currently pricing in around a 65% chance that the Fed will keep rates unchanged at its upcoming policy meeting in September. Still, a hotter-than-expected US inflation reading strengthened expectations for a Fed rate increase before year-end, with the probability of a hike by December remaining above 70%. Meanwhile, precious metals continued to benefit from the so-called debasement trade, as the US Treasury’s expanded debt buybacks heightened concerns over the risk of a US debt crisis and further dollar weakness. On the geopolitical front, oil prices remained elevated as escalating tensions in the Russia-Ukraine war offset signs of diplomatic progress in the Middle East.

Silver edged higher above $68 an ounce on Thursday as investors awaited fresh policy signals from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday. Despite slightly hotter-than-expected US inflation data, concerns over global debt continue to support demand for the precious metal. Silver reached two-month highs earlier this week, with its recent rally driven by renewed concerns over dollar debasement following the US Treasury's decision to increase buybacks of older, long-dated bonds. Investors are looking to Warsh's debut Jackson Hole speech for clues on the Fed's path toward bringing inflation back to target. Data released Wednesday showed the PCE price index rose 3.7% year-on-year in July, slightly above expectations. Markets now see a 38% chance of a September rate hike, while the probability of a hike by December remains above 70%, according to the CME FedWatch Tool.

Silver climbed toward $69 an ounce on Thursday, nearing two-month highs as investors continued to assess the outlook for Federal Reserve monetary policy ahead of a key meeting next month. Data released Wednesday showed US PCE prices rose more than expected in July and remained well above the Fed’s target, reinforcing a cautious outlook for interest rates. Investors now turn to Fed Chair Kevin Warsh’s speech at the annual Jackson Hole symposium on Friday, although he is not expected to provide clear guidance on the central bank’s September policy decision. Meanwhile, precious metals remained supported by the so-called debasement trade, as investors sought protection against the risk of a US debt crisis and a weaker dollar. Silver also benefited from robust industrial demand tied to the green energy transition, photovoltaic solar panels, electric vehicles and artificial intelligence data center infrastructure.