Spot Silver eased but held close to a 14-year peak of $41.66/oz. on Thursday, supported by investor expectations of a Federal Reserve interest rate cut this month and ahead of the key US CPI inflation report.
Annual headline consumer inflation in the US probably picked up to 2.9% in August from 2.7% in July, according to market consensus.
And, annual core CPI inflation probably steadied at 3.1% in August.
The most recent data showed US producer prices had surprisingly dropped in August due to lower trade services margins, which added to rate cut prospects.
Markets are now pricing in about a 92% chance of a 25 basis point Fed rate cut next week and an 8% chance of a super-sized 50 basis point cut.
Lower interest rates tend to reduce the opportunity cost of holding Silver, which pays no interest.
Additionally, robust industrial demand continued to support Silver prices amid supply constraints. Silver is facing its fifth successive year of a structural market deficit, according to the Silver Institute industry association.
The metal plays a crucial role in solar energy, electronics and broader electrification efforts.
Spot Silver was last down 0.30% on the day to trade at $41.04 per troy ounce.
Meanwhile, Silver futures for December delivery were last up 0.18% to trade at $41.674 per troy ounce.
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