Silver Holds Losses on Hawkish Fed View

Silver traded below $52 an ounce on Thursday, holding recent losses as a stronger US dollar weighed on the precious metal. The dollar gained support from hotter-than-expected US inflation figures and increasingly hawkish comments from Federal Reserve officials, reinforcing expectations of further interest rate increases. Fed Governor Christopher Waller indicated that a 50-basis-point hike in December may be necessary, while Dallas Fed President Lorie Logan supported at least two additional 25-basis-point increases to address persistent inflationary pressures. Markets are currently pricing in approximately a 91% probability of a rate hike next month, with further increases in January and potentially April also being factored in. Investors are now turning their attention to upcoming US economic releases, including weekly jobless claims, existing home sales and producer inflation data, for further indications of the Fed’s monetary policy outlook.

Silver pared its early gains to trade just above $52 an ounce on Wednesday, as the USD climbed to its highest level since April 2025, supported by stronger-than-expected inflation data and hawkish Federal Reserve commentary. A modest recovery in oil prices following their recent decline to 10-week lows also added to inflationary pressures. US consumer prices rose 0.4% in October, exceeding expectations of 0.3%, prompting markets to fully price in a December Fed rate hike, with the probability rising to 100% from 84% before the release, according to the CME FedWatch Tool. Expectations of a larger, 50-basis-point increase also gained momentum. Meanwhile, Fed Governor Christopher Waller suggested that persistent core inflation could justify a half-point hike as early as December, while other policymakers, including Anna Paulson and Michelle Bowman, maintained a hawkish stance, reinforcing expectations of tighter monetary policy and strengthening the US dollar, weighing on precious metals.

Silver climbed above $53 an ounce on Wednesday, reversing losses from the previous session when hawkish comments from Federal Reserve officials and stronger-than-expected US inflation data strengthened expectations of a rate hike in December. US headline inflation slowed to 0.4% MoM in October from 0.6% in September, but came in above market forecasts of 0.3%. Meanwhile, core inflation remained unchanged at 0.3% for the third consecutive month, exceeding expectations of 0.2% and signaling persistent underlying price pressures. Fed Governor Christopher Waller expressed support for further monetary tightening in December, adding that he would favor a half-percentage-point increase if inflation continues to accelerate. Dallas Fed President Lorie Logan also indicated that more aggressive rate hikes may be necessary to bring inflation under control. Consequently, markets are now pricing in approximately a 91% probability of a rate increase next month, up from 84% in the previous session.