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Silver drops as Fed tightening bets and Iran talks weigh on demand

Silver was last around $65.20, down 2.8% on the day, while markets price a nearly 90% chance of another Fed rate hike in December.

Reported · Written up by our desk · Major Pairs

Silver prices extended their decline on Wednesday, trading around $65.20 and down 2.8% on the day, as investors weighed a stronger US dollar and more hawkish expectations for US interest rates, according to FXStreet.

The Fed was cited as the main headwind for silver after raising its benchmark rate by 25 basis points at its September meeting, taking the target range to 3.75% to 4%, and indicating another hike could come before the end of the year. FXStreet said markets were pricing in nearly a 90% chance of another rate hike in December using the CME FedWatch tool.

FXStreet also pointed to the opportunity cost of holding non-yielding assets like silver as US rates stay higher for longer. Investors were set to watch preliminary US Purchasing Managers Index data, with resilient activity potentially reinforcing the Fed outlook and supporting the dollar.

On the geopolitical front, FXStreet said US-Iran talks were providing less support for precious metals. It noted that diplomatic progress discussed around the UN General Assembly helped reduce some safe-haven demand, even as negotiations continued and new US sanctions targeting Iranian aviation came into force.

Latest closeSilver $65.64 ▼0.4%

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