Silver Gains as Dollar Weakens

Silver climbed above $74 an ounce on Friday, extending gains from the previous session, supported by a sharp depreciation in the US dollar following reports that Japan intervened in currency markets. A softer greenback typically lends support to precious metals, which are priced in US dollars. Despite this, silver remains on track for a second weekly decline amid dimming prospects for a US-Iran peace deal and expectations that the Strait of Hormuz would not reopen anytime soon. Trump said that the US would maintain its naval blockade of Iranian ports, while Tehran pledged not to abandon its nuclear program and signaled it would retain control of the strait. The resulting energy supply disruption has heightened inflation concerns, reinforcing expectations that major central banks may keep interest rates elevated for longer or potentially tighten further.

Silver rose toward $73 per ounce on Thursday, bouncing from the one-month low of $71 in the previous session following a halt in the rally for oil prices and signs of bullish long-term demand. Prices for crude oil and product eased despite more impasses and threats between the US and Iran, driving bond yields to ease from their recent peaks and limiting the opportunity costs for markets to pile on non-interest bearing precious metals. In the meantime, fresh earnings from AI hyperscalers in the US extended the surge in AI infrastructure spending that has underpinned industrial demand for silver. $715 billion in AI capex has been penned by Meta, Alphabet, Microsoft, and Amazon, compared to $375 last year. The rebound took place despite strong data that supported hawkish dissenters from the Fed's last rate hold. The GDP was broadly aligned with estimates, core PCE prices accelerated more than expected, and initial unemployment claims were the lowest in nearly 50 years.

Silver climbed toward $73 an ounce on Thursday, rebounding modestly from three-week lows as investors monitored geopolitical developments following reports that the US military would brief President Donald Trump on potential action against Iran. Trump also said the US would maintain its naval blockade on Iran until a nuclear agreement is reached, while Tehran accused Washington of attempting to force the country into submission through economic pressure and internal divisions. The prolonged Middle East conflict and the near-closure of the Strait of Hormuz continued to unsettle global markets, leading traders to dial back expectations for rate cuts this year and instead begin pricing in the possibility of a hike in 2027. Meanwhile, the US Federal Reserve left its policy settings unchanged as widely anticipated, although four officials dissented, highlighting increasing divisions over the policy outlook amid heightened uncertainty tied to the Iran conflict.