Silver Pressured by Inflation Worries

Silver traded around $75 an ounce on Tuesday, struggling to gain traction as stalled peace negotiations between the US and Iran kept inflation risks and interest rate concerns in focus. On Monday, Iranian media reported that Tehran had suspended communications with Washington in response to Israeli attacks in Lebanon. Meanwhile, President Donald Trump said discussions are still ongoing and suggested that a memorandum of understanding with Iran to reopen the Strait of Hormuz could be reached as early as next week. Markets are currently factoring in a Federal Reserve rate hike before year-end after US inflation accelerated, driven in large part by the Middle East conflict. Investors are now awaiting this week’s US monthly jobs report and comments from Fed officials for additional clues on the future path of monetary policy.

Silver reversed early gains to trade below $75 an ounce in the first June session, remaining far from the two-month peak of $89.4 seen in mid-May. Rising oil prices, spurred by fresh Iran-US strikes and Iran’s suspension of communications with the US over Israel’s attacks on Lebanon, fueled inflation concerns and reinforced expectations of prolonged higher interest rates. Over the weekend, both sides exchanged proposals to revise a draft deal aimed at extending the ceasefire and reopening the Strait of Hormuz, though meaningful progress remains uncertain. Traders now see a roughly 60% chance of at least one US rate hike by year-end. Attention also shifts to this week’s US jobs data and upcoming remarks from Federal Reserve officials.

Silver steadied above $75 an ounce on Monday following a volatile week, as efforts to secure a longer-term ceasefire agreement between the US and Iran showed limited signs of progress. Over the weekend, Washington and Tehran exchanged proposals seeking amendments to a draft accord that would extend the ceasefire and reopen the Strait of Hormuz, though it remained uncertain whether the negotiations were moving closer to a resolution. President Donald Trump also reiterated his call for Iran to halt its nuclear program and fully restore the strait’s status as an open international waterway. Silver has faced headwinds since late February as the Middle East conflict drove energy prices sharply higher, fueling concerns about inflationary pressures and the prospect of interest rate hikes. Investors are now awaiting the latest US monthly jobs report later this week, which could offer fresh insight into labor market strength and the likely path of Federal Reserve policy.