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Silver drops below $65 as US PPI boosts Fed rate-hike bets

Silver was trading around $64.35 per ounce, while the 10-year Treasury yield hovered near 4.92%, its highest level since November 2023.

Reported · Written up by our desk · Major Pairs

Silver prices extended their slide on Thursday, trading around $64.35 per ounce and down 4.39% on the day.

FXStreet attributed the move to a firmer US Dollar and rising Treasury yields after US Producer Price Index data reinforced expectations the Federal Reserve could pursue tighter policy.

The US PPI rose 0.4% month over month in August, matching forecasts and up from 0.1% in July, while annual producer inflation increased to 5.4% from 4.8% previously. The PPI excluding food and energy rose 0.2% month over month, below the 0.3% expected, though it accelerated to 4.6% year over year from 4.3% in July, keeping further US monetary tightening on the table.

FXStreet also noted that markets were pricing about a 70% chance of a Fed rate hike at the next meeting, up from roughly 61% before the data release. The outlet said the drop is particularly hard for silver because the metal does not offer a yield, which can make it less attractive when bond yields rise, with further direction now tied to Friday’s US Consumer Price Index.

FXStreet added that rising oil prices linked to Middle East tensions are another factor clouding the inflation outlook, and it pointed to the US Dollar Index at about 98.90 as the dollar strengthened versus major currencies.

Latest closeSilver $67.91 ▲2.4%|Dollar index 98.78 ▼0.1%

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