Silver Retreats as Markets Await US Inflation and Fed Signals

Silver prices fell below $68.0 an ounce on Tuesday after reaching a two-month high of $70.0 last week, as the recent rally lost momentum ahead of US inflation data and Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole Symposium later this week. Investors are also assessing the US Treasury’s decision to double liquidity-support buyback operations for longer-dated notes and bonds, which helped push the dollar to a more than three-month low last week. Markets are currently pricing in a 38% chance of a US rate hike in September, according to the CME FedWatch Tool. Meanwhile, geopolitical tensions remain in focus, with Iran pledging to resist expanded US sanctions while expressing confidence that major trading partners will reject the pressure campaign and signalling that Washington remains interested in reviving talks.

Silver fell toward $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.