Silver trades near $53.00 as falling oil prices provide a lift, though robust US jobs data and rising Fed rate hike expectations continue to pressure the non-yielding metal.
Crude prices dropped after President Trump said further military strikes on Iran are 'highly unlikely' if progress on Iran's nuclear program continues and the Strait of Hormuz stays open. Reduced perceived supply-disruption risk from the Middle East conflict points to lower oil prices, though Iran's warning of retaliation against US and Israeli assets limits confidence.
Silver rebounded about $53.00 per troy ounce in Asian hours Monday after two losing days, helped by falling crude prices easing inflation pressure. However, a 78%+ market-implied chance of a 25bp Fed rate hike in December and strong US jobs data (NFP 165,000, unemployment 4.1%) support the Dollar and non-yielding silver is a headwind. Tuesday's CPI and Friday's PPI could tip the balance either way.
Robust US jobs data (NFP 165,000 vs 65,000 consensus, unemployment down to 4.1%) supports the Greenback and a 78%+ December hike probability, yet ABN Amro strategists flag a repricing of Fed expectations with 'further downside for the USD' being tested by Monday's US events. Bullish and bearish forces largely offset ahead of Tuesday's CPI.
Silver prices rebounded to near $53.00 per troy ounce on Monday, snapping a two-day losing streak as declining crude oil prices reduced inflationary concerns. Despite the recovery, the metal faces headwinds from a strong US labor market and a greater than 78% market-implied probability of a 25-basis-point Federal Reserve rate hike in December.
Crude prices dropped after President Trump said further US military strikes on Iran are highly unlikely, provided progress continues on Iran's nuclear program and the Strait of Hormuz remains open.
Iran has warned it will retaliate against any future strikes by targeting US and Israeli assets, so renewed conflict would revive supply-disruption fears.
Silver recovered to around $53.00 per troy ounce in Asian trading on Monday as falling oil prices eased inflationary pressures, after two days of losses.
Markets price an over 78% chance of another 25-basis-point Fed rate hike in December, and strong US jobs data supports the Dollar, which weighs on non-yielding silver. Tuesday's CPI and Friday's PPI are the key tests.
Strong US jobs figures and rising expectations of a December Fed rate hike support the Dollar, but strategists at ABN Amro note markets have been repricing Fed expectations with downside risks for the USD, which upcoming US data will test.