Silver is also being impacted by the sharp sell-off in the global equity markets. Weakness in leveraged positions in volatile technology stocks is leading to margin calls, which is forcing some hedge funds to sell silver to meet the margin call.

Switching back to the rate hike concerns, the market now largely expects the Federal Reserve to leave policy unchanged at next week’s meeting, but December is still a major worry. According to the FedWatch Tool, there is a 92% chance of the Fed leaving rates where they currently are and a 78% probability of a 25 basis point hike in December.

Looking ahead, the U.S. Personal Consumption Expenditures (PCE) report, the Fed’s preferred inflation gauge, is due to be released on October 29. It could offer further insight as to the state of inflation. It will be released shortly before the Fed concludes its policy meeting so it may have an impact on its decision. Earlier in the month, stronger-than-expected U.S. consumer and producer inflation numbers supported the case for tighter monetary policy later this year.