Silver prices reversed an early Friday advance and slipped below $57 per ounce on October 16, extending a difficult week for precious metals as stronger-than-expected US inflation data reinforced expectations of another Federal Reserve interest rate increase before year-end.<\/p>\n
Kitco quoted spot silver at a bid price of $56.86 per ounce and an ask of $57.11 at 4:11 p.m. Eastern time, with the bid down 0.77% on the day. Earlier, Reuters reported silver rising 0.5% to $57.73 at 06:33 GMT, before the metal surrendered those gains during US trading.<\/p>\n
The decline leaves silver substantially below the $60.45 level recorded in FinanceFeeds’ October 12 silver price analysis<\/a>. The latest Kitco bid is $3.59, or approximately 5.9%, below that earlier reference, although the comparison uses different quote providers and does not represent an exact weekly closing return.<\/p>\n Meanwhile, futures markets were pricing approximately a 90% probability of a Federal Reserve rate increase in December, according to CME FedWatch figures reported by Reuters later on Friday.<\/p>\n Silver entered the week trading above $60, with investors awaiting September’s US consumer and producer inflation reports. At the time, the central question was whether the metal could recover toward $61.72 or face another decline.<\/p>\n The inflation releases changed the near-term market outlook.<\/p>\n On Wednesday, the Bureau of Labor Statistics reported that US consumer prices rose 0.6% in September, lifting annual inflation to 3.7% from 3.4% in August. Gasoline prices increased 9.1% during the month, accounting for more than half of the overall monthly increase.<\/p>\n Thursday’s producer-price report reinforced those concerns. The Producer Price Index for final demand rose 1.3% in September and 6.3% over the preceding 12 months. Reuters described the monthly increase as the largest in four and a half years.<\/p>\n Silver suffered significant selling pressure following Wednesday’s CPI release before recovering some ground on Thursday as Treasury yields and the dollar retreated.<\/p>\n Friday’s reversal suggests the recovery had not restored confidence. The metal traded between $56.77 and $58.10 during the session, according to Kitco.<\/p>\n The October 12 FinanceFeeds analysis had identified $57.26 as its bearish scenario. Friday’s late-session bid moved below that projection, highlighting how rapidly the week’s inflation developments altered the price outlook.<\/p>\n Markets increasingly expect the Federal Reserve to maintain restrictive monetary policy as inflation remains above its 2% target.<\/p>\n The Fed raised its benchmark interest rate by 25 basis points in September, bringing the target range to 3.75%\u20134.00%. Investors are now assessing whether another increase will follow in October or December.<\/p>\n Expectations for an immediate October increase shifted sharply on Friday. An early Reuters report at 04:33 GMT put the probability of an October hike at 28%. By 06:33 GMT, that estimate had fallen to 13%, while the December probability stood at 89%.<\/p>\n A later Reuters market update placed the December probability at approximately 90%, with traders largely expecting the Fed to leave rates unchanged in October.<\/p>\n Fed Chair Kevin Warsh expressed confidence in the resilience of the US economy on Friday but offered no definitive indication of the next policy decision.<\/p>\n Chicago Fed President Austan Goolsbee described the stronger inflation figures as “discouraging,” while Cleveland Fed President Beth Hammack indicated that a deterioration in inflation expectations could justify more aggressive monetary tightening.<\/p>\n The changing interest rate outlook matters for silver because the metal pays no interest. Higher yields can increase the opportunity cost of holding bullion relative to income-generating assets.<\/p>\n Investor Takeaway:<\/strong> Markets increasingly favor a December rate increase rather than an immediate October move. For silver, the timing of further tightening remains important because expectations for interest rates influence yields, the dollar and investment demand.<\/p>\n Silver’s weakness formed part of a broader retreat across precious metals, although Friday’s intraday movements differed between individual commodities.<\/p>\n Reuters reported spot gold at $4,165.12 per ounce at 2:07 p.m. Eastern time, down 0.1% on the day and approximately 0.7% for the week.<\/p>\n Platinum was unchanged at $1,626.15 per ounce, while palladium declined 1.1% to $1,113.61. Reuters said silver, platinum and palladium were all heading for weekly losses.<\/p>\n The selling occurred despite weakness in the US dollar, which was on course for its first weekly decline in five weeks. A softer dollar usually supports dollar-denominated precious metals by making them less expensive for overseas buyers.<\/p>\n That relationship has not been sufficient to reverse silver’s broader decline, with persistent inflation and uncertainty over the Fed’s policy path remaining important influences.<\/p>\n OANDA senior market analyst Kelvin Wong told Reuters that “Inflationary trends still remain hot,” pointing to the stronger core consumer and producer inflation readings.<\/p>\nWhat Changed for Silver Since October 12?<\/h2>\n
Why Are December Fed Rate Hike Odds Near 90%?<\/h2>\n
Gold and Platinum Also Face Weekly Losses<\/h2>\n