Silver prices climb above $62.50 as expectations for further Fed rate hikes weaken.

• Silver is poised for a strong rebound amid a softer Fed outlook, easing inflation concerns, and weaker oil prices.
• Silver gains momentum as signs of a slowing US labor market prompt investors to reassess the path of interest rates.
• According to the CME FedWatch tool, the probability of a September rate hike fell to 52% from 66% following the latest data release.

Silver prices extended gains for a fourth straight session on Friday, with XAG/USD trading near $62.60 per troy ounce during Asian trading hours. A softer inflation outlook, weaker oil prices, and a less aggressive Federal Reserve are providing strong support for the non-yielding metal’s recovery.

Silver is attracting renewed buying interest as signs of a slowing US labor market prompt investors to sharply reassess the outlook for interest rates. The shift in sentiment followed Thursday’s June Nonfarm Payrolls (NFP) report, which showed the US economy added only 57,000 jobs, well below expectations of 110,000. Although the unemployment rate unexpectedly edged down to 4.2% from 4.3% in May, the weak hiring figures reinforced concerns about broader economic cooling.

In response, traders pared back expectations for tighter monetary policy. Data from the CME FedWatch tool showed the probability of a September rate hike falling to 52%, compared with 66% before the jobs report.

Additional support came from recent comments by Federal Reserve Chair Kevin Warsh at the ECB Sintra Conference, where he reiterated the Fed’s commitment to its 2% inflation target while noting that inflation pressures and expectations have eased in recent weeks.

Silver is also benefiting from declining energy prices, which are helping reduce inflationary pressures. Crude oil prices have weakened as shipping activity through the Strait of Hormuz continues to normalize following progress in US-Iran diplomatic negotiations in Doha. The easing geopolitical tensions have reduced the risk premium that had previously supported energy markets.