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Silver slips toward $59.50 as Fed-hike fears mount

Silver fell 0.73% to about $59.50, with CME FedWatch showing an almost 80% chance of at least one Fed rate hike this year.

Reported · Written up by our desk · Precious Metals

Silver prices retreated during European trading, with XAG/USD sliding 0.73% to near $59.50 as the market turned more worried about the Federal Reserve delivering further upside interest rate moves, according to FXStreet.

FXStreet cited CME FedWatch data indicating the probability of the Fed delivering at least one rate hike this year is almost 80%. Higher rates are typically less supportive for non-yielding assets like silver, especially as investors also weighed a stronger US dollar.

The decline also reflected renewed Middle East tensions tied to the US and Iran, a backdrop FXStreet said could keep oil prices higher and affect broader inflation expectations. At the same time, the US Dollar Index, which tracks the greenback against six major currencies, recovered after revisiting a three-week low of 100.60 and was around 100.87 as of writing.

Looking ahead, FXStreet pointed to the upcoming US Consumer Price Index release for June, due Tuesday, as investors seek fresh signals on the path of monetary policy. The outlet also noted that silver’s price is sensitive to both interest-rate expectations and the dollar, since it is priced in US dollars.

Latest closeSilver $60.37 ▲3.8%|Dollar index 100.94 ▼0.1%

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