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Silver falls near two-month lows ahead of US CPI

XAG/USD was around $59.25, while the US Dollar Index traded near 102.25, below Monday’s peak of 102.61.

Reported · Written up by our desk · Major Pairs

Silver prices slipped on Tuesday, dropping more than 1.5% as hawkish Federal Reserve expectations and higher US Treasury yields weighed on the non-yielding metal, according to FXStreet.

FXStreet reported that a softer US dollar helped limit losses ahead of Wednesday’s US Consumer Price Index (CPI) release. At the time of writing, XAG/USD traded around $59.25, near two-month lows, while the US Dollar Index was near 102.25, below Monday’s peak of 102.61.

The outlook for US inflation and rates was central to the move. FXStreet said traders were pricing an 80% probability that rates will remain unchanged this month via the CME FedWatch Tool, and noted that a hotter CPI print could lift the dollar and yields and renew expectations of a rate hike at the Fed’s October 27 to 28 meeting.

FXStreet also said higher borrowing costs can raise the opportunity cost of holding non-yielding assets like silver, while elevated oil prices keep inflation risks skewed to the upside.

Latest closeSilver $59.48 ▼0.7%|Dollar index 102.12 ▼0.1%

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