Silver Holds Firm on Soft US Inflation

Silver traded just below $59 an ounce on Wednesday after gaining nearly 2% in the previous session, as softer-than-expected US inflation data prompted traders to dial back expectations for Federal Reserve interest rates hikes. The annual US inflation rate slowed to 3.5% in June from 4.2% in May, coming in below forecasts of 3.8% as lower oil prices helped ease energy-related inflation. Consumer prices also fell 0.4% from the previous month, marking the first monthly decline since 2020. Meanwhile, Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability during congressional testimony on Tuesday but refrained from signaling a more aggressive policy stance. Markets continue to price in roughly a 50% chance of a Fed rate hike in September, as renewed tensions between the US and Iran lifted oil prices and kept inflation concerns firmly on investors’ radar.

Silver rose nearly 2% to $58.9 an ounce on Tuesday after weaker-than-expected US inflation data dampened expectations for Federal Reserve rate hikes. The headline CPI fell to 3.5% in June, driven by slowing energy inflation, while the core rate unexpectedly eased to 2.6%, both below forecasts. Month-over-month, the CPI dropped 0.4%, its first decline since 2020. Still, annual rates remain well above the Fed’s target. Investors now await Federal Reserve Chair Kevin Warsh’s first congressional testimony for signals on a potential September hike. Money markets still price in an over 50% chance of a quarter-end rate increase, particularly amid renewed US-Iran tensions. President Donald Trump announced plans to reinstate a blockade on Iranian vessels in the Strait of Hormuz and sought compensation from nations benefiting from US security efforts in the region.

Silver rose above $58 an ounce on Tuesday but held most of the losses from the previous session, as President Donald Trump announced plans to reinstate a blockade on Iranian vessels transiting the Strait of Hormuz and sought reimbursement from countries benefiting from US efforts to secure the vital shipping lane. The move drove oil prices sharply higher, reviving concerns over inflation and the interest rate outlook. The measures followed renewed hostilities between Washington and Tehran, with the US targeting Iran’s ability to disrupt maritime shipping while Tehran retaliated against US allies in the region. Investors also awaited key US inflation data and Federal Reserve Chair Kevin Warsh’s testimony before the US Congress later today, with markets closely parsing his remarks for further policy guidance. Markets now price in roughly a 51% chance of a Fed rate hike in September, compared with a 23% probability that the central bank will leave rates unchanged.