Silver Set for Weekly Drop

Silver held below $64 an ounce on Friday and was on track to decline around 4% for the week, pressured by a stronger dollar and surging Treasury yields as expectations grew that the Federal Reserve may need to raise interest rates further to curb inflation. On Thursday, the 10- and 30-year US Treasury yields rose to their highest levels since 2007 and 2004, respectively, while the dollar climbed to a near two-month high. The moves came as stronger-than-expected US economic data and elevated oil prices fueled concerns over persistent inflation and higher interest rates. Markets are currently pricing in roughly a 67% probability of a Fed rate hike in October, following the first increase in three years last week. Meanwhile, oil prices retreated on reports that the US and Iran were considering a phased agreement that could reopen the Strait of Hormuz and lift a US blockade on Iranian ports.

Silver fell below $64 an ounce on Thursday, pressured by growing expectations that the US Federal Reserve could tighten monetary policy further. Rising inflation pressures and signs of a resilient economy are reinforcing bets on another rate hike, with traders increasing positions for a second consecutive tightening in late October. The pressure on precious metals intensified as the US dollar climbed to a two-month high, following data showing US business activity expanded in September at its fastest pace in more than five years. Meanwhile, weekly jobless claims fell to a near 60-year low, underscoring the strength of the labor market and supporting expectations for tighter policy. Elsewhere, oil prices continued to rise as US-Iran diplomatic talks showed no concrete signs of progress, raising concerns over potential supply disruptions.

Silver fell toward $64 an ounce on Thursday, extending losses from the previous session, pressured by a stronger dollar and surging Treasury yields. Those moves came as stronger-than-expected US private-sector data heightened inflation concerns and strengthened expectations for further Federal Reserve rate hikes. Several Fed officials have also reiterated support for last week’s rate increase while warning about persistent inflation risks. Markets are now pricing in around a 70% chance of another Fed rate hike in October, up from 55% a day earlier. At the same time, oil prices rebounded as Iranian President Masoud Pezeshkian maintained a firm stance, saying Tehran would not allow freedom of navigation through the Strait of Hormuz while sanctions and a US blockade remain in place. Higher oil prices add to inflationary pressures, reinforcing expectations for a more hawkish interest-rate outlook.