Silver Slumps as Geopolitical and Inflation Risks Rise

2026-05-12 12:59 By Joana Ferreira 1 min. read

Silver dropped over 2% to $84.2 an ounce on Tuesday, pressured by heightened Middle East uncertainty and the prolonged shutdown of the Strait of Hormuz, which pushed oil prices higher and kept inflation risks in focus.

A stronger dollar also weighed on the metal.

US President Donald Trump stated that the US-Iran ceasefire was on "massive life support" after rejecting Tehran’s latest peace proposal, fueling concerns that the critical shipping route could remain blocked.

Reports suggest Trump will meet with his national security team to discuss a potential restart of military operations and revisit plans to escort commercial ships through the Strait.

Meanwhile, US inflation rose to 3.8% in April, exceeding forecasts of 3.7% and marking the highest level since May 2023, while the core rate also came in above expectations at 2.8%.

The data complicates the Federal Reserve’s outlook, with traders pricing in over a 70% chance of a rate hike by April 2027 and ruling out cuts through year-end.



News Stream
Silver Slumps as Geopolitical and Inflation Risks Rise
Silver dropped over 2% to $84.2 an ounce on Tuesday, pressured by heightened Middle East uncertainty and the prolonged shutdown of the Strait of Hormuz, which pushed oil prices higher and kept inflation risks in focus. A stronger dollar also weighed on the metal. US President Donald Trump stated that the US-Iran ceasefire was on "massive life support" after rejecting Tehran’s latest peace proposal, fueling concerns that the critical shipping route could remain blocked. Reports suggest Trump will meet with his national security team to discuss a potential restart of military operations and revisit plans to escort commercial ships through the Strait. Meanwhile, US inflation rose to 3.8% in April, exceeding forecasts of 3.7% and marking the highest level since May 2023, while the core rate also came in above expectations at 2.8%. The data complicates the Federal Reserve’s outlook, with traders pricing in over a 70% chance of a rate hike by April 2027 and ruling out cuts through year-end.
2026-05-12
Silver Pulls Back After Sharp Rally
Silver dropped below $85 an ounce on Tuesday, reversing gains from earlier in the session as elevated geopolitical uncertainty in the Middle East and the prolonged disruption of the Strait of Hormuz kept oil prices higher and sustained inflation concerns. President Donald Trump said the US-Iran ceasefire was on “massive life support” after rejecting Tehran’s latest peace proposal, deepening fears that the strategically vital shipping corridor could remain effectively constrained for an extended period. At the same time, investors looked ahead to the latest US consumer inflation data for signals on how the Iran conflict is feeding through into broader price pressures. Meanwhile, silver surged more than 7% to a two-month high on Monday, outperforming other precious metals due to its significant industrial usage, which improved expectations for physical demand alongside its traditional safe-haven appeal.
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Silver Surges 6% to Two-Month High
Silver soared over 6% to $85.5 an ounce on Monday, rebounding from early losses to hit its highest level in nearly two months as investors monitored US-Iran negotiations. President Donald Trump dismissed Iran’s peace proposal as “totally unacceptable,” heightening the risk of renewed conflict, while weekend attacks in the Middle East threatened a fragile April ceasefire. With diplomatic efforts stalled, the Strait of Hormuz remains blocked, keeping oil prices high and fueling inflation concerns. Expectations for two US rate cuts this year have faded, with forecasts now split between limited easing and no cuts in 2026. Markets also focused on Tuesday’s US CPI data and Trump’s upcoming China visit, where he will meet President Xi Jinping to discuss Iran, Taiwan, AI, and nuclear weapons.
2026-05-11