Silver Extends Rally into 2026

Silver rose 1% to around $58 an ounce on Friday, recovering some ground after tumbling more than 3% in the previous session, as investors assessed developments in the Middle East for clues on energy-driven inflation risks and the outlook for US interest rates. Concerns over Gulf oil supply disruptions have lifted crude prices, reinforcing expectations that interest rates could remain higher for longer and weighing on precious metals. Investors are now focused on next week's Federal Reserve meeting, where policymakers are widely expected to leave rates unchanged, although markets continue to price in roughly an 80% chance of a rate hike in September. Meanwhile, the European Central Bank kept interest rates unchanged on Thursday, as expected, while signaling that another increase in September remains on the table.

Silver fell toward $57 per ounce on Friday after falling more than 3% in the previous session, as surging oil prices fueled by the escalating Middle East conflict strengthened the case for tighter US monetary policy. President Donald Trump threatened broader military action against Iran and said Tehran would be held responsible for any future Houthi attacks on Red Sea shipping, helping propel Brent crude above $100 a barrel for the first time since May. The jump in oil prices stoked inflation concerns, reinforcing expectations of tighter Fed policy and weighing on non-yielding assets. Markets now see a 34% chance of a rate hike next week, with the probability of a September increase exceeding 81%. Separately, fresh US tariffs of 10%–12.5% on imports from major trading partners added to market uncertainty. Despite the recent pullback, silver remained on track for a weekly gain.

Silver prices fell below $59 per ounce on Thursday, retreating from two-week highs as escalating tensions in the Middle East drove oil prices higher and reinforced expectations that the US Federal Reserve may raise interest rates later this year. The Iran-backed Houthis claimed responsibility for attacks on two Saudi oil tankers as part of a naval blockade, raising concerns over a new chokepoint for global crude supplies. At the same time, the US launched a 12th consecutive night of strikes on Iran, prompting further retaliation and heightening fears of prolonged disruptions to Gulf energy exports. The surge in oil prices has intensified inflation concerns, strengthening expectations that the Fed will keep monetary policy tighter for longer. Higher interest rates typically reduce the appeal of non-yielding assets such as silver. Money markets are currently pricing in about a 78% probability of a Fed rate hike in September.