Silver Tumbles on Renewed Risk Appetite

Silver prices collapsed over 6% toward $88 on Monday, paring a 3% morning rally as a massive "risk-off" rotation and a surging US dollar overran earlier safe-haven buying.

While the initial strikes on Iran triggered a spike to 96.40 dollars, the market’s focus shifted to the economic fallout of the Strait of Hormuz closure, which threatens 20% of global energy flows and risks a deep industrial slowdown.

This threat to energy-intensive manufacturing has dampened the demand outlook for silver in the solar and electronics sectors, causing it to underperform gold's relative stability.

Pressure intensified as the ISM Manufacturing Prices Index leaped to 70.5, a 11.5 point jump that signaled reignited inflation and slashed the probability of Fed rate cuts.

With the US dollar hitting a five-week high and 10-year Treasury yields climbing, the opportunity cost of holding silver has soared, while liquidations by leveraged futures traders to cover broader stock market losses added pressure.