Silver Rises Above $58 on Weaker Dollar

Silver climbed above $58 per ounce on Thursday, supported by a weaker US dollar as investors assessed the Federal Reserve's decision to keep interest rates unchanged and monitored escalating tensions in the Middle East. The Fed left its benchmark rate at 3.50%-3.75%, while Chair Kevin Warsh reiterated the central bank's commitment to bringing inflation under control. Meanwhile, the US military said it struck dozens of IRGC targets in Iran after Tehran launched ballistic missiles at US troops in Jordan, heightening concerns that a broader conflict could reignite inflationary pressures. Markets are pricing in roughly a 60% chance of a Fed rate hike in September. Higher interest rates typically weigh on non-yielding precious metals such as silver by increasing the opportunity cost of holding them.

Silver fell toward $57 an ounce on Thursday, giving back the previous session’s gains as traders reassessed the Federal Reserve’s policy outlook after the central bank left interest rates unchanged. Three FOMC members dissented in favor of a rate hike, while Chair Kevin Warsh emphasized that the decision to keep rates steady should not be viewed as a sign of policy inertia, adding that markets would continue to respond to incoming economic data. Markets are now pricing in roughly a 67% chance of a 25-basis-point Fed rate hike in September, up from 56% a day earlier, while expectations for a larger 50-basis-point increase have largely disappeared. Silver also came under pressure from rallying oil prices after the US launched a fresh wave of strikes against Iran in response to attacks on American forces across the Middle East, raising concerns about further disruptions to global energy supplies.

Silver steadied around $57.5 an ounce on Thursday after the Federal Reserve left interest rates unchanged despite mounting inflationary pressures stemming from renewed conflict in the Middle East. The decision offered some support to bullion, as higher interest rates tend to weigh on demand for non-yielding assets. Still, three FOMC members dissented in favor of a rate hike, while Chairman Kevin Warsh said that if inflation remains elevated throughout the forecast period, higher interest rates could become an appropriate policy response. Elsewhere, both the BOE and the BOJ are widely expected to keep interest rates unchanged this week while maintaining a cautious approach to inflation. In the Middle East, President Donald Trump pledged a strong response after an attack on US forces in Jordan. Meanwhile, the two sides continued to struggle to reach a potential agreement as Tehran insisted on retaining control of the Strait of Hormuz.