Silver Extends Losses on Fed Rate Hike Bets

Silver fell to around $65.50 an ounce on Monday, with trading volumes subdued due to a US holiday, after stronger-than-expected US jobs data pushed bond yields higher and reinforced expectations of a Federal Reserve rate hike this month. US nonfarm payrolls increased by 162,000 in August, well above expectations for a 56,000 gain, while the unemployment rate held steady at 4.1%. Traders now see nearly a 60% chance of a rate hike at the Fed’s policy meeting next week, up from around 50% before Friday’s jobs report, according to the CME FedWatch Tool. Investors are now awaiting PPI and CPI data later this week for further clues on the Fed’s policy outlook. Inflation concerns remain elevated after crude oil prices touched a near three-month high following an exchange of strikes on shipping between the US and Iran over the weekend. Iran’s Foreign Ministry said Tehran and Oman would soon announce details of a temporary safe route through the Strait of Hormuz.

Silver fell below $66 an ounce on Monday, extending losses from the previous session, pressured by growing expectations of an imminent Federal Reserve interest rate hike following stronger-than-expected US jobs data last week. Data released Friday showed US nonfarm payrolls rose by 162,000 in August, following an upwardly revised increase of 23,000 in July and well above market expectations for a gain of 56,000. Meanwhile, the unemployment rate remained unchanged at 4.1%, while annual wage growth slowed to 3.1%, although the decline was smaller than economists had expected. Markets increased bets on a September Fed rate hike to roughly 60%, up from around 50% before the data release. Silver also remained under pressure from higher oil prices as the US and Iran exchanged strikes on ships over the weekend, stoking concerns about renewed inflationary pressures.

Silver fell 3% to below $65 an ounce on Friday as the dollar strengthened after stronger-than-expected US employment data reinforced expectations for tighter monetary policy. US nonfarm payrolls increased by 162,000 in August, following an upwardly revised gain of 23,000 in July and comfortably surpassing market expectations for a 56,000 increase. The unemployment rate remained unchanged at 4.1%, while annual wage growth eased to 3.1%, although the slowdown was less pronounced than anticipated. The resilient labor-market data strengthened the case for tighter monetary policy, with money markets now pricing in a near 60% probability of a Federal Reserve rate hike in September, according to the CME FedWatch Tool. The stronger dollar and rising rate expectations weighed on silver, which is particularly sensitive to changes in interest-rate and currency dynamics.