Last Updated on 11/09/2026
- Silver prices fall as markets see a 72% chance of the Federal Reserve raising interest rates by 25 basis points next week.
- The US Producer Price Index (PPI) increased 5.4% year-over-year in August, exceeding forecasts and adding to concerns over persistent inflation.
- Rising tensions between the US and Iran, along with Houthi gains near the Red Sea, drive oil prices higher and weigh on Silver.
Silver (XAG/USD) extends its decline for a second consecutive session, trading near $63.30 per troy ounce during Asian trading hours on Friday. The precious metal remains under pressure as expectations increase that the Federal Reserve (Fed) could raise interest rates in September.
The CME FedWatch Tool currently shows markets pricing in more than a 72% probability of a 25-basis-point rate hike next week, up significantly from the 61% probability seen before the latest Producer Price Index (PPI) report. Investors are now turning their attention to the upcoming US Consumer Price Index (CPI) data, which could provide further confirmation of expectations for tighter monetary policy.
The bearish pressure on Silver follows a stronger-than-expected PPI report released by the US Bureau of Labor Statistics on Thursday. Headline PPI increased 5.4% year-over-year in August, accelerating from July’s 4.8% rise and exceeding market expectations of 5.3%. On a monthly basis, headline PPI climbed 0.4%, in line with forecasts, while core PPI increased 0.2%, slightly below initial expectations.
Silver is also facing pressure from sharply higher oil prices amid escalating tensions between the US and Iran, which have added to concerns about broader inflation. Geopolitical risks have intensified further after BBC sources reported that Yemen’s Houthis captured the strategic Red Sea port city of Mokha from Saudi-backed government forces. The development puts the Iran-aligned group approximately 75 kilometers (46 miles) from the Bab al-Mandab Strait, an important southern gateway for major trade routes linking Asia and Europe.
Industrial Precious Metals Under Pressure as Rates Rise
According to TD Securities, industrial precious metals such as Silver and platinum-group metals (PGMs) are facing significant selling pressure as higher interest rates and weakness in base metals weigh on the broader market. This highlights the vulnerability of the more cyclical parts of the precious metals sector to the current macroeconomic environment.
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