Silver traded cautiously around $66 an ounce on Tuesday as investors weighed expectations of a Federal Reserve rate hike against a weaker dollar ahead of key US inflation data later this week. Rising oil prices also renewed concerns over inflation. Oil extended gains to multi-week highs amid escalating Middle East tensions after Yemen’s Iran-backed Houthis attacked energy facilities and cities in Saudi Arabia, a key US ally. Meanwhile, Friday’s stronger-than-expected jobs report pointed to a strengthening labor market, prompting traders to price in roughly a 60% chance of a Fed rate hike at the September meeting. While silver is traditionally seen as an inflation hedge, higher interest rates tend to reduce the appeal of the non-yielding asset. Investors now await producer price data on Thursday and consumer inflation figures on Friday for further clues on the Fed’s policy outlook.