Silver Declines After Volatile Session

Silver slipped to around $73.5 per ounce on Thursday following sharp swings in the previous session, as investors weighed a fragile Middle East ceasefire amid sporadic clashes and ongoing uncertainty over the reopening of the Strait of Hormuz. Iranian media reported that oil tanker traffic through the strait had been halted after Israeli strikes on Lebanon, while a senior Iranian official said three provisions of the ceasefire proposal had already been breached. Meanwhile, US Vice President JD Vance indicated the strait may start reopening as he leads a US delegation to Islamabad for direct talks with Iran. Oil prices rebounded slightly, and the dollar and bond yields edged higher, keeping downward pressure on precious metals. On Wednesday, silver surged as much as 6.3% following the ceasefire announcement before surrendering nearly all gains as investors took profits amid a broader risk-on rally in global equities.

Silver prices pared earlier gains but remained up about 1% at $73.9 per ounce on Wednesday, after rising sharply as the US and Iran agreed to a temporary two-week ceasefire, which includes the reopening of the Strait of Hormuz and a suspension of US military strikes. In response, oil prices plunged, the dollar weakened, and bond yields declined, all of which supported demand for the white metal. However, some investors moved to take profits as risk appetite returned to global equity markets. At the same time, caution persisted amid reports of localized airstrikes in the region, underscoring the fragility of the Pakistan-brokered truce. Meanwhile, minutes from the FOMC’s March meeting showed policymakers were concerned that Middle East hostilities could lead to sustained inflation requiring further rate hikes, although they still expected one rate cut this year. Since the Iran conflict began on February 28, silver has fallen by nearly 20%.

Silver prices soared over 5% to $76.70 per ounce on Wednesday, reaching their highest level since March 18, after the US and Iran agreed to a two-week ceasefire. The deal, which includes a 10-point negotiation framework and the reopening of the Strait of Hormuz, eased concerns over energy-driven inflation and led investors to adjust their 2026 interest rate outlook. The Federal Reserve is expected to keep borrowing costs unchanged this year, reversing earlier fears of a potential rate hike. While precious metals like silver typically serve as a hedge against inflation and uncertainty, their appeal weakens in a high-interest-rate environment due to their lack of yield. Since the Iran conflict began on February 28, silver has fallen by 18%.