Silver Rises to $74.5 on Middle East Tensions

Silver climbed to $74.5 per ounce on Thursday, reflecting investor concerns over the fragile US-Iran ceasefire and escalating Middle East conflict. A weaker dollar added to the upward momentum as traders assessed whether the ceasefire would hold. With key disputes unresolved and the Strait of Hormuz remaining closed, tensions intensified after US President Donald Trump warned of major escalation if Iran rejects a deal. Meanwhile, Israel’s deadliest attack in Lebanon, killing over 250, prompted Tehran to threaten retaliation. Since the war began on February 28, silver has declined nearly 20%, as surging oil prices and fears of energy-driven inflation reduced expectations of US interest rate cuts in 2026.

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%.