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Silver
Source: Newsmaker.id
Silver prices hovered around US$66.33 per troy ounce during Monday's trading (August 31), edging down approximately 0.1%. Today's movement stayed within a range of roughly US$65.61–US$67.47, indicating continued high volatility following heavy selling pressure late last week.
Silver remains overshadowed by shifting expectations regarding Federal Reserve policy after Fed official Kevin Warsh struck a hawkish tone at Jackson Hole. Markets now price in a roughly 64% probability of a September rate hike, a sharp increase from the ~35% seen prior to Warsh's remarks.
A higher interest rate environment weighs on silver by increasing the opportunity cost of holding a non-interest-bearing metal. Simultaneously, US Treasury yields remain elevated—with the 10-year yield hovering around 4.75%—thereby dampening investor appetite for precious metals.
Inflationary pressures have also returned to the spotlight after oil prices surged due to escalating US-Iran tensions in the Strait of Hormuz. Rising energy costs reinforce concerns that inflation could prove persistent, giving the Fed further grounds to maintain a tight monetary policy stance.
Despite the recent pullback, silver has posted a strong performance throughout August, gaining approximately 15% after hitting its highest level since mid-June. This suggests that current selling pressure reflects profit-taking and interest rate repricing rather than a fundamental shift in the medium-term bullish trend.
Concerns regarding US fiscal health continue to provide support. Previous long-term Treasury buyback programs have reignited the "debasement trade" narrative, prompting investors to seek real assets like gold and silver as hedges against government debt risks, bond market stress, and potential dollar depreciation.
Market focus now shifts to US labor market data, specifically the ADP report and Nonfarm Payrolls (NFP). The Reuters consensus forecast anticipates an addition of approximately 55,000 jobs in the August NFP report. Weak labor market data could lower rate-hike expectations and serve as a positive catalyst for silver, whereas strong data would likely sustain pressure stemming from yields and interest rates.
Newsmaker Analysis: Silver's fundamentals are currently caught in a tug-of-war between the pressure of high interest rates and support from themes of currency debasement and geopolitical uncertainty. As long as prices hold within the US$65–US$66 range, the possibility of a rebound remains. However, to retest the US$67–US$70 range, silver requires a weaker dollar, lower yields, or US economic data weak enough to dampen expectations of interest rate hikes. (arl)
Source: Newsmaker.id