XAG/USD stabilizes near a seven-week high as traders await July US inflation data influencing Fed policy expectations.
Silver (XAG/USD) trades narrowly around $63.50 in early Asian trading, remaining close to Friday’s seven-week peak of $65.16. The metal’s direction hinges on Wednesday’s US Consumer Price Index (CPI) report, which will shape Federal Reserve interest rate expectations.
Recent US jobs data weakened hawkish Fed bets, with Nonfarm Payrolls (NFP) showing a 23K job loss versus 80K expected. June’s NFP was also revised down to 20K from 57K. The CME FedWatch tool now prices a 46% chance of a September rate hike, down from 67% a week ago.
Higher inflation could revive Fed tightening fears, pressuring non-yielding assets like silver. Conversely, softer data may support bullion prices by reducing rate hike odds.