Silver holds steady ahead of Powell remarks

Silver held firm above $38 per ounce on Friday after two consecutive sessions of gains, as investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium for signals on the interest rate outlook.

Markets remain cautious that Powell could attempt to temper expectations for a near-term rate cut, with traders closely watching whether he emphasizes inflation persistence or growing risks to the labor market. Futures currently imply about a 75% probability of a 25 basis point cut in September, down from more than 90% a week earlier, suggesting investors are hedging against a more hawkish tone.

Policymaker remarks this week reflected the ongoing divide within the Federal Reserve. Kansas City Fed President Jeffrey Schmid said “modestly restrictive” monetary policy remains appropriate in light of inflation risks, while Cleveland Fed President Beth Hammack reiterated her opposition to cutting rates at this stage, signaling resistance to front-loaded easing. Still, softer US economic data in recent weeks, including signs of slowing consumer demand and moderating wage growth, have bolstered the case for gradual policy loosening.

Silver has also shown notable resilience in recent sessions, diverging from gold by holding firm despite weakness in the yellow metal and strength in the US dollar. This relative outperformance highlights silver’s dual role as both a monetary hedge and an industrial metal. Steady demand from sectors such as solar panel manufacturing and electronics has underpinned prices even as broader safe-haven demand softened.

For now, the market is poised to take its next directional cue from Powell’s Jackson Hole address, with volatility likely to increase depending on whether his remarks reinforce or push back against the market’s dovish bias.