Silver Slips on Hawkish Fed Signals

Silver fell below $66 an ounce on Tuesday, remaining under pressure as hawkish remarks from Federal Reserve officials reinforced expectations that US interest rates will stay higher for longer. The US central bank raised its policy rate by 25 basis points last week, its first such move in three years, while Chair Kevin Warsh signaled that further rate increases could come in the months ahead. Other Fed officials, including St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee, continued to stress the need for additional tightening to contain inflation fueled by strong demand and rising energy prices. Markets are now pricing in roughly a 90% chance of another rate hike in December, according to the CME FedWatch Tool. Meanwhile, oil prices fell for a fifth consecutive session following reports that Iran could reopen the Strait of Hormuz within seven days if the US takes initial steps to ease military pressure.

Silver fell toward $66 an ounce on Tuesday, remaining under pressure as hawkish comments from Federal Reserve officials boosted expectations for further US interest rate hikes. On Monday, Chicago Fed President Austan Goolsbee said the central bank must account for persistent supply shocks, while St. Louis Fed President Alberto Musalem said additional increases may be needed to bring inflation toward the Fed’s target. Investors now await speeches from Fed officials John Williams and Tom Barkin later today. Meanwhile, falling oil prices offered some support for silver amid increased diplomatic efforts to end the Middle East conflict and signs of continued energy flows from the region. President Trump is due to address the UN General Assembly in New York later today and may meet Iranian President Pezeshkian on the sidelines.

Silver strengthened above $66 an ounce on Tuesday, resuming its advance as falling oil prices eased inflation concerns and expectations for further interest rate hikes. Oil prices declined for four straight sessions amid increased diplomatic efforts to end the Middle East conflict and signs of continued energy flows from the region. President Donald Trump is scheduled to address the UN General Assembly in New York later today and may meet with Iranian President Masoud Pezeshkian on the sidelines. Lower oil prices help ease inflationary pressures, reducing expectations for additional rate hikes by the Federal Reserve. Meanwhile, Chicago Fed President Austan Goolsbee said the central bank cannot overlook repeated and persistent supply shocks, while St. Louis Fed President Alberto Musalem said further rate increases may be necessary to achieve the Fed’s inflation goal. Investors now await speeches from Fed officials John Williams and Tom Barkin later today.