Silver (XAG/USD) posts moderate losses on Thursday, trading at seven-month lows around $57.00 at the time of writing, after a nearly 12% sell-off in the previous two days.
Rising bets of Federal Reserve (Fed) rate hikes later in the year have hammered precious metals this week, with investors awaiting the release of the US Personal Consumption Expenditures (PCE) Price Index data to confirm those views
An array of upbeat US macroeconomic figures, namely the labour market’s improvement, combined with above-target inflation, has prompted Fed officials to adopt a more hawkish stance in recent weeks. Markets are now pricing a 32% chance of a rate hike at next month’s meeting and a 65% probability of some monetary tightening in September. This has boosted US Treasury yields, pushing the US Dollar higher.
The US calendar is packed with data on Thursday, but the main focus will be on the US PCE Price Index for May. PCE inflation is expected to have accelerated to a 4.1% year-on-year rate, its highest level in three years, as these figures predate the decline in Crude prices. These figures are unlikely to provide any significant support to Silver.