Silver prices slip another 2%, down 11% in 9 sessions; what's behind the fall?
Also Read: Gold price dips ahead of US Fed meeting. Opportunity to buy in this correction?Currently, Comex silver is trading at $29.2 per ounce, down $3.27 from its 11-year high of $32.75, marked on May 29. Domestically, silver prices on the MCX fell to ₹88,161 per kilo in today's session.
On Friday, silver prices tumbled 5% in intraday trade following the release of the U.S. jobs report, which supported a hawkish outlook for the Federal Reserve. The report showed that nonfarm payrolls increased by 272,000 in May, surpassing the estimate of 185,000 and April’s gain of 175,000.This underscores the resilience of the U.S.
labor market during a prolonged period of restrictive interest rates by the Federal Reserve. The data added to signals of a robust macroeconomic backdrop after the ISM PMI reflected a sharp expansion in the U.S. services sector.The data supports the case for a lower magnitude of rate cuts by the Federal Reserve this year, assuming inflation does not slow to the central bank’s target.
Consequently, markets now expect just one rate cut this year. Also Read: Midcaps, smallcaps strongly outperform Sensex in 2024 despite valuation concerns; what is driving broader market?The odds for a Fed easing in September fell sharply to 55% from 68% before the report, as data suggests that higher interest rates would remain in place for longer, strengthening the dollar and making silver more expensive for overseas buyers.Fed officials have indicated that more evidence is needed to confirm inflation is easing toward the central bank’s 2% target as they consider when to cut rates. Investors are looking for convincing signs of a soft landing that would justify U.S.
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