Spot Silver surged on Monday, following Friday’s sell-off, as investors weighed the Federal Reserve’s interest rate outlook.
Yet, gains seemed limited, as the US Dollar held close to a six-month high. A firmer dollar makes dollar-priced Silver less appealing to international investors holding other currencies.
Markets are now pricing in about a 70% chance of a 25 basis point Fed rate cut in December, compared to a 74% chance in the prior trading session.
The probability of rate cuts had risen to 74% from about 35% on Friday after dovish remarks by New York Fed President John Williams. He said that a near-term rate cut remained possible, with labor market weakness posing a higher risk than elevated inflation.
At the same time, Dallas Federal Reserve President Lorie Logan called for keeping borrowing costs on hold “for a time”.
An increasing number of Fed officials have signaled reticence on further rate cuts due to inflation concerns and indications of relative stability in the US labor market.
Spot Silver was last up 0.42% on the day to trade at $50.21 per troy ounce.
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