Silver Plunges on Profit-Taking After Record Rally

Silver fell below $76 an ounce on Wednesday, struggling to gain traction as investors remained cautiously optimistic that the US and Iran could still secure a peace agreement despite renewed tensions in the Middle East. President Donald Trump said negotiations to extend a ceasefire and reopen the Strait of Hormuz are continuing, while US Secretary of State Marco Rubio warned that any final agreement may still take several days to complete. At the same time, the US military said it carried out self-defense strikes in southern Iran, while Iran’s Revolutionary Guard claimed it fired at an F-35 fighter jet and multiple drones after they allegedly entered Iranian airspace. Even so, silver prices remain nearly 20% below levels seen at the start of the conflict, as concerns over an energy-driven inflation shock strengthened expectations that major central banks may keep monetary policy tighter for longer.

Silver fell below $77 an ounce on Tuesday, paring gains from the previous session as heightened uncertainty in the Middle East kept investors cautious about inflation risks. The US military reportedly targeted missile launch sites and vessels suspected of attempting to deploy mines in southern Iran, with US Central Command saying the operations were aimed at protecting American troops in the region. Meanwhile, President Donald Trump said talks with Tehran were progressing well, though he warned that additional attacks could follow if negotiations broke down. Silver prices remain down nearly 20% since the conflict began, as fears of an energy-driven inflation shock reinforced expectations that central banks could maintain tighter monetary policy for longer. Still, the sharp decline in oil prices over the past week has helped ease concerns about inflationary pressures and further interest rate hikes.

Silver traded above $77 an ounce on Tuesday after rising nearly 4% in the previous session, supported by indications that the US and Iran were moving closer to an agreement that could end the conflict and reopen the Strait of Hormuz. Negotiations between Washington and Tehran have reportedly centered on extending the ceasefire for roughly two months, during which the US would lift its blockade while Iran would allow shipping through Hormuz to resume. However, major obstacles remain, particularly over Iran’s nuclear program and its insistence on retaining control over maritime traffic in the strategic passage. Meanwhile, oil prices declined sharply, easing worries about inflationary pressures and the prospect of further interest rate hikes. Despite the recent rebound, silver prices are still down roughly 17% since the conflict began, as fears of an energy-driven inflation shock strengthened expectations that central banks could keep monetary policy tighter for longer.