Silver Falls, Markets Wary of US CPI and Interest Rate Risk
Silver prices weakened sharply on Tuesday, falling below US$66 per ounce, down more than 4%—returning to an area last seen in December 2025—as the market held its ground ahead of the release of US inflation data. This weakness indicates investors are increasingly sensitive to the direction of interest rates, not just the safe-haven factor.
The main focus now turns to the US CPI, scheduled for release on Wednesday. Consensus expects inflation to rise to 4.2% year-on-year in May, a nearly three-year high, driven by surging energy costs. If this figure is confirmed or higher, pressure on non-yielding precious metals like silver could continue.
Silver's pressure also came from last week's stronger-than-expected US employment data, with 172,000 jobs added in May. The combination of a solid job market and tepid inflation has led the market to raise bets on tightening, with market participants now pricing in the chance of a December Fed rate hike at around 70%.
On the geopolitical front, signs of potential de-escalation emerged after Iran and Israel halted attacks following US pressure. This development temporarily pressured oil prices and eased concerns about energy inflation. However, uncertainty over a broader agreement has kept sentiment fragile, leaving silver vulnerable to rapid shifts in inflation and interest rate expectations. (arl)
Source: Newsmaker.id
