Silver slipped below $62.50 on Monday, ending a four-day winning streak as traders leaned into bets that the Federal Reserve will raise interest rates before year-end. The pullback follows a week in which the metal surged more than 5.55% on weak US jobs data.
Silver's run of gains stalled on Monday, with XAG/USD trading around $62.30 per troy ounce during European hours as the metal ended a four-day winning streak. The white metal edged lower as markets grew more convinced the Federal Reserve will lift rates later this year.
Rate-hike bets weigh on silver
Traders have moved firmly toward pricing in tighter policy. According to the CME FedWatch tool, markets now price about a 77% probability of a rate increase by year-end.
Attention now turns to the data calendar. Investors will watch the US ISM Services PMI due later in the day, but the primary focus has shifted to Wednesday's release of the Fed's June policy meeting minutes for clearer guidance on the path of rates.
A rally built on soft labor data
Monday's dip interrupts a strong stretch. Silver surged over 5.55% the previous week, a rally sparked by weak US labor data that forced markets to temper expectations for a September hike. June's Nonfarm Payrolls grew by just 57,000, well below the 110,000 forecast.
The headline unemployment rate unexpectedly ticked down to 4.2% from May's 4.3%, yet the sharp slowdown in hiring pointed to broader economic cooling.
Easing oil takes off some pressure
Falling energy prices have also shaped the backdrop. Easing oil prices have helped dampen the inflation pressures that earlier heightened fears of aggressive rate hikes, according to FXStreet. Energy markets moved lower on recovering flows through the Strait of Hormuz and the prospect of increased OPEC+ supply, easing a key macro headwind for non-yielding precious metals like silver.
Source: FXStreet
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