Silver Holds Near 7-Week High

Silver pries were near the $62 per ounce mark on Thursday, remaining near the seven-week high from the previous session as markets reconsidered the likelihood that the Federal Reserve will hike rates this year. Fuel and natural gas prices held most of their pullback in August as the US presidential administration chased an agreement with Iran and GCC members that restores energy exports through the Persian Gulf. Lower risks that higher fuel prices would lift underlying inflation trimmed expectations that the Federal Reserve would raise rates this year. Industrial demand for silver also supported bids, as Chinese imports of silver-bearing ores surged 62.5% annually in June to 219,000 tonnes. The data was in line with an expanding production for solar panels and electricity grids. Still, lingering risks of a flare-up in energy prices maintained silver relatively close to the seven-month low of $55 per ounce from July 16th. On top of that, manufacturing demand in China was seen slowing,

Silver held above $62 an ounce on Thursday after rising for three straight sessions, as a deal to partially reopen the Strait of Hormuz pushed oil prices lower, easing concerns over inflation and the outlook for interest rates. Iran and Oman reached an agreement on a shipping corridor through the strait, boosting expectations of increased energy flows from the Middle East. Markets scaled back expectations for Federal Reserve interest rate hikes this year, now pricing in just one increase by year-end, compared with two as recently as last week. Meanwhile, ADP data showed the US economy added only 44,000 private-sector jobs in July, the weakest reading since January and well below forecasts for 70,000. Elsewhere, Fed Governor Lisa Cook reiterated on Wednesday that she remains prepared to raise rates if inflation fails to cool, warning that the central bank may not have the luxury of waiting before bringing inflation back to its 2% target.

Silver surged to $62.5 an ounce on Wednesday, its highest level since June 22, as easing geopolitical tensions and weaker-than-expected US labor market data strengthened expectations of a less aggressive Federal Reserve. Investor sentiment improved after President Donald Trump said the US and Iran had held "very good discussions," fueling hopes of an agreement to end their five-month conflict. Expectations of restored Middle Eastern energy supplies have driven oil prices down about 10% this week, easing inflation concerns and reducing expectations for further Fed tightening. Meanwhile, the ADP Employment Report showed the US economy added just 44,000 private-sector jobs in July, the weakest reading since January and well below forecasts of 70,000. Markets now assign a 57% probability to a September Fed rate hike, down from 67% a day earlier. Still, Kansas City Fed President Jeff Schmid said additional policy tightening may be needed to return inflation to the central bank's 2% target.