Silver (XAG/USD) edges lower on Thursday, snapping a two-day losing streak as stronger-than-expected US Producer Price Index (PPI) and upbeat Jobless Claims data bolster the US Dollar. At the time of writing, the metal is trading near $38.00 during the American session, down nearly 1.30% on the day.

Earlier in the Asian session, XAG/USD struggled to sustain gains above $38.50, peaking at $38.74 — its highest level since July 25 — before sellers pushed prices lower. Meanwhile, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is staging a modest recovery after falling to a more than two-week low on the previous day. The index has climbed back above the 98.00 psychological mark following the release of stronger-than-expected PPI and steady Weekly Jobless Claims, as traders reassess the outlook for Federal Reserve (Fed) rate cuts.

The latest US labor market and inflation data underscore a resilient economy with pockets of persistent price pressure, complicating the Federal Reserve's (Fed) policy outlook. Initial Jobless Claims slipped to 224K in the week ending August 8, better than the expected 228K and lower than the prior week's 227K, while Continuing Claims eased to 1.953 million, narrowly undershooting forecasts.

On the inflation front, July's Producer Price Index jumped 0.9% MoM, the sharpest monthly gain since June 2022 and well above the 0.2% consensus estimate, following a flat reading in June. This pushed the annual rate to 3.3%, surpassing expectations of 2.5% and accelerating from 2.4% previously. The upside surprise in producer prices comes on the heels of an in-line headline CPI and a slightly hotter core CPI earlier this week, suggesting that underlying price pressures remain sticky.

Source: fxstreet