Federal Reserve Rate Hikes
Silver Prices Fall Below $66 as Hawkish Federal Reserve Signals Further Rate Hikes
Anonymous
Silver prices remained under pressure near $66 an ounce as hawkish Federal Reserve officials indicated that additional interest-rate increases may be needed to contain persistent inflation and strong demand. Markets were pricing a high probability of another rate hike, weighing on precious metals, although falling oil prices and improving prospects for US-Iran diplomacy provided some support. In China, silver trading was subdued after early holiday-related stocking demand faded as prices rose, with spot transactions concentrated near parity with Shanghai Gold Exchange futures. Platinum also moved in a narrow range, with limited downstream demand and mostly small-volume purchases as buyers held adequate inventories. Fed officials, including Alberto Musalem and Austan Goolsbee, said policymakers should act decisively if inflation fails to ease.
Key Points
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SMM reported the Shanghai Gold Exchange Ag (T+D) price at 16,177 yuan per kilogram, with quotes ranging from a 5-yuan discount to a 10-yuan premium and a weighted average price of 1.59 yuan per kilogram.
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Iran reportedly conditioned any reopening of the Strait of Hormuz on the lifting of the maritime blockade, the unfreezing of Iranian assets and an end to the war on all fronts.
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Markets were pricing roughly a 90% probability of another rate increase in December, while the Federal Reserve’s previous hike was a 25-basis-point move described as its first in three years.
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Investors were awaiting remarks from New York Fed President John Williams and Richmond Fed President Tom Barkin; current President Trump was also scheduled to address the UN General Assembly and could meet Iranian President Pezeshkian on the sidelines.
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Platinum’s most-traded GFEX PT2612 contract closed at 440.35 yuan per gram, down 0.73%, while SGE Pt 9995 traded near a 4-yuan-per-gram spread to that contract; spot purchases were largely negotiated and small in volume because downstream users held sufficient inventories.
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