Trending
Silver
Source: Newsmaker.id
Silver prices weakened during Wednesday's trading (August 26) after US inflation data shifted Federal Reserve policy expectations back toward a slightly more hawkish stance. Spot silver last traded around US$67.91 per troy ounce—down approximately 1.1%—after previously holding above US$68. Gold also faced pressure, falling more than 1%, indicating a broad sell-off across the precious metals market following the release of the US data.
The primary pressure stemmed from the July PCE Price Index, which rose 0.2% month-on-month, exceeding the 0.1% forecast. On an annual basis, headline inflation held at 3.7%, also surpassing the 3.6% consensus. Meanwhile, Core PCE rose 0.2% monthly and remained at 3.3% annually; while this met expectations, it remains well above the Fed's 2% inflation target.
Other economic data also indicated that the US economy has not lost much momentum. Second-quarter GDP growth was maintained at 1.5%, while quarterly consumer spending was revised upward to 3.4%. The combination of persistent inflation and resilient economic activity has led the market to reconsider the possibility that the Fed is not yet finished with its tightening policy.
Market reactions were immediately visible in the dollar and bond markets. The Dollar Index rose about 0.2% to 99.12, while the yield on the 10-year US Treasury note climbed to around 4.65%. The probability of a Fed rate hike in September rose to approximately 40%, up from around 36% prior to the data release. A stronger dollar and higher yields create a negative combination for silver, as the metal does not generate interest income.
On the geopolitical front, developments between Iran and Oman have helped reduce some of the risk premium on precious metals, though the situation is not yet fully resolved. Both nations have made progress regarding the Strait of Hormuz; however, Iran has insisted that the waterway will not reopen unless the US accepts its proposed terms. Consequently, geopolitical risk could still provide a floor for silver prices should negotiations deteriorate again.
Newsmaker Analysis: Silver’s short-term fundamentals have shifted to a bearish-consolidative phase after PCE data strengthened the dollar, yields, and the likelihood of a rate hike. The US$67–US$68 range is now a critical zone for maintaining the prior uptrend structure. If dollar pressure persists, silver risks testing lower levels. Conversely, a return of prices above US$68.50–US$69 could signal a re-entry of buyers. The next major catalyst is Kevin Warsh’s speech at Jackson Hole on Friday; a hawkish tone could push silver lower, whereas a more cautious stance might trigger a rebound. (arl)
Source: Newsmaker.id