Hot PPI, Silver Under Pressure
Silver prices (XAG/USD) held below US$38 per troy ounce on Friday, after plunging more than 1% in the previous session. Pressure persisted as higher-than-expected US producer price inflation (PPI) dampened hopes for a significant Fed rate cut in September and kept interest in non-yielding assets low.
Data-wise, weekly jobless claims came in at 224,000, better than the 228,000 forecast, indicating a still-resilient labor market. The combination of a hot PPI and solid claims has reduced the urgency for aggressive easing, reinforcing the "soft landing" narrative among market participants.
Market expectations now place a >90% chance of a 25 bps cut next month, while the 50 bps option has virtually evaporated. St. Louis Fed President Alberto Musalem asserted that a half-point cut is unnecessary, a day after Treasury Secretary Scott Bessent suggested such an option remains a possibility—contradictory statements that add to uncertainty about the policy path.
On the geopolitical stage, US President Donald Trump and Russian President Vladimir Putin are scheduled to meet in Alaska on Friday evening to push for an end to the war in Ukraine. The outcome of the meeting could potentially impact risk appetite and the direction of commodities, including precious metals.
Looking ahead, silver will be sensitive to upcoming US data and the Fed's communication. As long as pressure from producer inflation data remains unabated and the market sees no new catalysts, silver's upside is expected to be limited, although volatility remains high. (alg)
Source: Newsmaker.id
