Silver Extends Gains on Lower Oil Prices

Silver climbed toward $67 an ounce on Friday, extending gains from the previous session, supported by falling oil prices that eased inflation concerns and helped push bond yields lower. Oil prices declined for a third consecutive session as Saudi Arabia worked to restore flows through its East-West pipeline, while President Donald Trump is set to meet with Gulf leaders next week. Treasury yields also pulled back from multi-year highs, with the US 10-year yield falling to around 4.93% after briefly exceeding 5% earlier this week. Meanwhile, investors continued to assess the outlook for Federal Reserve monetary policy following its first rate hike in three years. The US central bank signaled that additional tightening could be needed to contain inflationary pressures, with markets now pricing in roughly a 53% probability of a move in October.

Silver climbed 3% to around $65.5 an ounce on Thursday as investors reassessed their positions following the US Federal Reserve’s first rate hike in three years. The dollar retreated from a seven-week high reached after US policymakers raised rates and signalled further hikes in the coming months, with Chief Kevin Warsh joining the unanimous decision and highlighting concerns that inflation remains elevated. Higher interest rates typically weigh on precious metals by increasing the appeal of interest-bearing assets. Elsewhere, the Bank of England kept interest rates unchanged on Thursday, while the Bank of Japan is widely expected to raise rates to a 31-year high on Friday. Oil prices extended their decline as concerns over supply disruptions eased, while US President Trump said he hoped an end to the war with Iran was near.

Silver climbed toward $64 an ounce on Thursday, recovering losses from the previous session as the recent rally in oil prices lost steam, easing inflationary pressures. Those moves followed reports that Saudi Arabia is aiming to restore around half of its East-West pipeline capacity within days and return it to full operation within six weeks. US Energy Secretary Chris Wright also said that 18 million barrels of crude and petroleum products passed through the Strait of Hormuz earlier this week. Still, silver remained under pressure after the US Federal Reserve raised interest rates and signaled another hike before the end of the year. The Fed increased the fed funds rate by 25 basis points to 3.75%-4%, as expected, marking its first rate increase in three years. Fed Chair Kevin Warsh also said inflation remains elevated, while data released last week showed core US inflation rose more than anticipated in August.