XAG/USD falls as Fed rate hike bets surge to 73.8% after stronger-than-expected US jobs data and inflation concerns.
Silver prices (XAG/USD) slid to $66.50 in late Asian trading, marking the lowest level in over two months. The decline follows a sharp rise in US Treasury yields, driven by heightened expectations of a Federal Reserve rate hike this year.
The CME FedWatch tool now shows a 73.8% probability of at least one rate increase, up from 45.2% a week ago. Stronger-than-expected US Nonfarm Payrolls data for May, with 172K jobs added versus 85K estimates, and upward revisions for April reinforced hawkish Fed bets. Rising yields reduce the appeal of non-yielding assets like silver.
Investors await Wednesday’s US Consumer Price Index data for further inflation signals, amid concerns over elevated energy prices and geopolitical tensions in the Middle East.