Silver Drops on Middle East Uncertainty

Silver fell below $73 an ounce on Friday and was set for a weekly decline of nearly 4%, pressured by ongoing uncertainty in the Middle East that kept inflation risks and interest rate concerns in focus. President Donald Trump said peace negotiations were approaching their final stage and is reportedly reluctant to re-enter full-scale war with Iran despite recent tensions. However, Iranian Foreign Minister Abbas Araghchi said there has been no meaningful progress in the discussions. Iran-backed Hezbollah also rejected a US-mediated ceasefire proposal between Israel and Lebanon, adding to doubts over efforts to de-escalate regional hostilities. The prolonged conflict and continued disruptions to energy flows through the Strait of Hormuz kept oil prices elevated, reinforcing concerns about inflation and the risk of higher interest rates.

Silver steadied above $73 an ounce on Friday, holding onto gains from the previous session as hopes persisted that the US and Iran could still reach a diplomatic solution to end the conflict and reopen the Strait of Hormuz. President Donald Trump said peace negotiations were nearing their final phase and is reportedly reluctant to return to full-scale war with Iran despite recent tensions. However, Iranian Foreign Minister Abbas Araghchi said there has been no meaningful progress in the talks. Iran-backed Hezbollah also rejected a US-mediated ceasefire proposal between Israel and Lebanon, raising doubts about Trump’s efforts to bring an end to regional hostilities. Despite the recent support, silver remains on track for a weekly decline as the prolonged conflict and continued disruptions to energy flows through the Strait of Hormuz kept oil prices elevated, fueling concerns about inflation and the prospect of higher interest rates.

Silver climbed above $74.5 per ounce on Thursday as hopes for a Middle East resolution weakened the dollar and oil prices, easing inflation and interest rate hike concerns. Israel and Lebanon’s ceasefire agreement to end hostilities raised hopes for a broader de-escalation in the US-Israeli conflict with Iran. Additionally, the Republican-led US House of Representatives passed a resolution to block President Donald Trump from continuing military action against Iran. However, uncertainty about the war’s end persists, and regional tensions remain elevated. Since the conflict began in late February, silver has lost about 20% as surging oil prices fueled inflation fears and increased the likelihood of higher interest rates.