Silver Trims Losses After Trump’s Iran Strike Delay

Silver pared early losses to trade at $67 per ounce on Monday, after President Trump delayed strikes on Iran for five days, citing "productive conversations" with Tehran. However, Iran’s Fars News Agency denied any negotiations, attributing Trump’s move to Iran’s threat to strike all West Asian power plants. The metal remained near its lowest since December, extending a sharp downturn driven by soaring oil prices and inflation fears. Last week, silver crashed over 15% as markets braced for prolonged monetary tightening, including a possible Fed rate hike by year-end. The ECB, BoE, and BoJ also held rates but warned of further tightening if inflation persists.

Silver dropped as much as 4.8% toward $64 per ounce on Monday, extending its selloff into a fourth week as the ongoing Middle East conflict intensified inflation fears, while major economies face pressure to boost liquidity to offset the war’s impact. The Iran war shows little sign of easing, with President Donald Trump threatening strikes on Iranian power plants if the Strait of Hormuz is not reopened, while Tehran warned it would target key US and Israeli assets across the region if its energy facilities were hit. Last week, silver declined over 15% as surging oil prices fueled inflation concerns, prompting markets to price in a prolonged pause or potential rate hikes from major central banks. Traders are increasingly betting on a possible Federal Reserve rate increase toward year-end amid fears of persistent inflation. The ECB, BOE and BOJ also kept rates unchanged last week but signaled readiness to tighten policy further if inflationary pressures persist.

Silver plunged 5% to $69.5 per ounce on Friday, marking a 14% weekly collapse, as the Middle East conflict drove energy prices higher and crushed hopes for monetary easing. The sell-off accelerated after reports of expanded US military deployment to the region, pushing traders to assign a 50% probability to a Federal Reserve rate hike by October and to price in at least three hikes each from the European Central Bank and Bank of England in 2026. The metal has now declined for three straight weeks since the US-Israel strikes on Iran, weighed down by rising Treasury yields, a resurgent dollar, and investor liquidations to cover losses. Earlier this week, major central banks, including the Fed, ECB, BoE, and Bank of Japan held rates steady but signaled readiness to tighten policy further if inflationary pressures persist.