Silver Surges 5% as US-Iran Ceasefire Cools Inflation Worries

Silver jumped around 4% to $50.80 an ounce on Monday, rebounding from 11-month lows, as declining oil prices eased inflation concerns, while investors shifted their focus to the November 3 US midterm elections. Precious metals had faced heavy selling pressure on Friday as a sharp selloff in technology and AI stocks triggered a dash for cash, forcing investors to liquidate safe-haven holdings. However, optimism surrounding a potential US-Iran diplomatic breakthrough, coupled with renewed doubts about the sustainability of the AI boom, has prompted some reassessment of the Federal Reserve's tightening outlook. Meanwhile, oil prices tumbled after Iranian and Qatari officials held a third consecutive day of talks aimed at securing an end to the US-Israeli war on Iran. Lower energy prices could help contain inflationary pressures and ease expectations of interest rates remaining higher for longer, reducing the opportunity cost of holding non-yielding assets such as silver.

Silver climbed toward $50 an ounce on Monday, recovering modestly from near one-year lows as declining oil prices eased concerns over inflation and potential interest rate increases. Oil prices declined amid signs of ongoing diplomatic efforts to prevent renewed US military action against Iran following the midterm elections. President Trump had previously threatened to resume strikes against Iran after the vote, while Tehran warned of broader retaliation. Meanwhile, investors are awaiting this week’s closely watched US jobs report for further insight into the Federal Reserve’s monetary policy outlook, with markets currently assigning around a 75% probability of a rate hike in December. Last week, silver faced significant selling pressure as persistent concerns over energy-driven inflation strengthened expectations of further Fed rate increases. A broader global equity selloff fueled by AI concerns also prompted investors to liquidate silver holdings to cover losses in other assets.

Silver prices plunged below $50 an ounce for the first time since November 2025, as rising energy costs and persistent inflation concerns strengthened expectations that US interest rates will remain higher for longer. Major central banks, including the Federal Reserve and the European Central Bank, kept rates unchanged this week but warned that the fight against inflation remains unfinished, pointing to renewed price pressures from surging energy costs. Meanwhile, US data released Thursday showed inflation accelerating in September, with core price growth also picking up, reinforcing expectations of a potential Fed rate hike in December. Precious metals also faced pressure from a sharp sell-off in technology stocks, triggered by concerns over rising AI-related spending, which may have prompted forced liquidations and margin calls across markets. At the same time, oil prices advanced amid fears of an escalating conflict in the Middle East, adding to inflationary concerns.