Silver Falls Amid Easing Rate-Cut Bets

Silver prices pared earlier losses to hover around $75 per ounce on Wednesday as the metal found support from a weakening US dollar and shifting geopolitical signals in the Middle East. While the asset extended a sharp monthly sell-off from March it recovered from recent lows as the dollar index retreated from a ten-month high following signs that the US aims to restore vessel flows in the region. President Donald Trump indicated that Iran requested a ceasefire but he noted the US will only consider a deal once the Strait of Hormuz is fully operational and secure while warning of further escalation if attacks on tankers persist. This rhetoric maintained volatility across commodity markets as oil prices fluctuated after a brief dip while the 10-year Treasury yield remained little changed following a significant rise last month. Despite the recovery silver remains well below its record highs as strong US private employment and retail sales data suggest the economy remains resilient.

Silver slipped to around $74 per ounce on the first trading day of April, extending its sharp monthly sell-off of more than 20% in March. This marked the steepest decline since September 2011, and silver now trades nearly 40% below January’s record highs, reflecting inflation concerns amid disrupted energy markets and prompting a hawkish shift by investors and central banks. Traders have abandoned expectations of US rate cuts in 2026, reversing pre-war forecasts of two cuts. Meanwhile, markets briefly steadied early in the session as hopes of easing Middle East tensions emerged. President Trump indicated that the US had largely achieved its military objectives and would leave other nations to manage issues in the Strait of Hormuz. This followed Iranian state media citing President Masoud Pezeshkian, who said the Islamic Republic is ready to end the war if its conditions are met.

Silver rose to $73 per ounce on Tuesday, drawing some buying interest at lower levels, but remained on track for its biggest monthly drop in over 14 years. The metal has plummeted more than 20% in March, its sharpest decline since September 2011, and now trades nearly 40% below the record highs reached in late January. The escalating Middle East conflict has disrupted global energy markets and intensified inflation concerns, prompting investors and central banks to adopt a more hawkish stance on interest rates. With Iran maintaining its blockade of the Strait of Hormuz, the crisis has driven a surge in oil prices, reinforcing expectations of tighter monetary policy. Traders have fully abandoned bets on US rate cuts in 2026, a dramatic shift from pre-war forecasts of two cuts, despite Fed Chair Jerome Powell’s reassurance that long-term inflation expectations remain contained. The US dollar has emerged as the dominant safe haven, weighing heavily on silver and other precious metals.