Silver Climbs for 2nd Session

Silver climbed above $76 an ounce on Friday, extending gains from the previous session supported by a decline in oil prices and U.S. dollar depreciation. WTI prices were down more than 3% on Friday morning after Pakistani officials confirmed that Iran had sent an updated peace proposal. At the same time, the dollar index hovered at a two-month low, pressured by a sharp rally in the yen following suspected intervention by Japanese authorities. Still, silver prices are down 18% since the beginning of the war, as energy supply disruptions have heightened inflation concerns, reinforcing expectations that major central banks may keep interest rates elevated for longer or potentially tighten further.

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.