Silver prices rebound amid Fed rate hike expectations and Middle East tensions

Silver prices have seen a modest rebound, trading around $66.70, as market participants weigh hawkish signals from the Federal Reserve against rising geopolitical tensions in the Middle East.

Following the Jackson Hole Symposium, expectations for interest rate hikes have increased. Markets currently see a 61% chance of a 25-basis-point hike in September, up from 35% prior to the symposium. While higher interest rates typically pressure non-yielding metals like silver, a slight pullback in the US Dollar and safe-haven demand due to Middle East instability have provided support.

Geopolitical friction has intensified as US forces reportedly attacked Iranian facilities on Larak Island, leading Tehran to claim it targeted US military facilities in Jordan and the United Arab Emirates. This escalation presents a complex outlook: while it boosts safe-haven demand, rising oil prices could fuel inflation and reinforce the Federal Reserve's restrictive monetary stance.

In the equities market, the Global X Silver Miners UCITS ETF fell 1.8% to 39.70 Euro. The decline follows a period of recovery that stalled after silver failed to maintain a position above the $70.00 per ounce resistance level. Investors are also reacting to company-specific news within the sector, including updates from Pan American Silver.