Silver Hovers Near 2-Month Highs

Silver fell below $68 an ounce on Tuesday, but stayed close to its highest level in two months while tracking strength in gold as US government interventions in the bond market revived the so-called debasement trade. The US Treasury Department announced an expansion of its buyback program for long-dated government debt last week in an effort to contain rising borrowing costs, with Secretary Scott Bessent saying he is prepared to increase the buybacks further while also flagging an upcoming longer-term fiscal plan. However, markets speculated that the measures may provide only a temporary solution, while renewing concerns over the risks of a US debt crisis, persistent inflation and dollar weakness. Silver also remained supported by solid industrial demand from the green energy transition, photovoltaic solar panels, electric vehicles and artificial intelligence data center infrastructure.

Silver erased early gains to trade slightly lower at around $68.5 an ounce on Monday, remaining near its highest level since mid-June. Investors are awaiting US inflation data and comments from Federal Reserve Chair Kevin Warsh this week for further clues on the interest-rate outlook. Silver gained more than 6% last week after a US Treasury buyback support plan pushed the dollar to multi-month lows. Markets are focused on the July PCE price index due Wednesday and Warsh’s speech at the Jackson Hole Symposium on Friday. Traders are pricing in a more than 40% chance of a rate hike in September, according to CME FedWatch. On the geopolitical front, the Trump administration announced an expansion of secondary sanctions targeting entities and countries maintaining business ties with Iran. Treasury Secretary Scott Bessent warned that at least one major financial institution could be sanctioned this week and suggested China would not be exempt.

Silver traded above $69 an ounce on Monday, hovering near its highest level since mid-June, as a subdued dollar supported demand for precious metals, while investors await US inflation data and comments from Federal Reserve Chair Kevin Warsh this week for further clues on the interest-rate outlook. Silver gained more than 6% last week after a US Treasury buyback support plan pushed the dollar to multi-month lows. Markets are focused on the July PCE price index due Wednesday and Warsh’s speech at the Jackson Hole Symposium on Friday. Traders are currently pricing in roughly a 40% chance of a rate hike in September, compared with a 60% probability of rates remaining unchanged, according to CME FedWatch. On the geopolitical front, the US threatened Iran with what it called “the greatest financial offensive ever marshalled,” as Washington prepares to impose economic sanctions targeting Iran’s trade partners.