Silver Hits Two-Month High

Silver climbed toward $88 an ounce on Wednesday, reaching its highest level in two months and outperforming other precious metals as industrial demand prospects improved. The metal, widely used in electronics, solar panels, and other industrial applications due to its high electrical conductivity, also serves as a traditional investment asset alongside gold. The gains came despite India raising import tariffs on gold and silver to 15% from 6%. However, reduced expectations for Federal Reserve rate cuts limited further upside. Hotter-than-expected US inflation data, with producer prices surging the most since early 2022 and consumer inflation hitting the highest since May 2023, led investors to price out a US rate cut this year, according to CME Group’s FedWatch. Elsewhere, US President Donald Trump’s visit to China will be monitored for any progress on the fragile trade truce and the Iran conflict.

Silver climbed toward $87 an ounce on Wednesday, hitting its strongest levels in two months and outperforming other precious metals amid an improving outlook for industrial demand. The metal is widely used in electronics, solar panels, and other industrial applications due to its high electrical conductivity, while also serving as a traditional investment asset alongside gold. Sentiment remained cautious, however, after hotter-than-expected US inflation data reduced expectations for Federal Reserve interest rate cuts. US consumer inflation rose 3.8% in April, above forecasts of 3.7% and the highest since May 2023. At the same time, oil prices extended gains over three consecutive sessions as diplomatic efforts to resolve the US-Iran war failed to produce progress, keeping inflation risks elevated. In other news, India has increased import tariffs on gold and silver in a bid to curb bullion purchases and support its currency.

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.