Silver Plunges as Investors Await US Inflation

Silver prices tumbled to $66 per ounce on Tuesday, retracing to levels last seen in December 2025, as investors turned their attention to the upcoming US inflation report. The report, due Wednesday, is expected to show inflation climbing to 4.2% in May, its highest in nearly three years, fueled by soaring energy prices. The inflation outlook follows last week’s stronger-than-expected US jobs data, which revealed 172,000 jobs added in May, surpassing forecasts. This has led investors to ramp up bets on Federal Reserve rate hikes this year, with traders now pricing in a 70% chance of a December increase. Meanwhile, signs of a potential Middle East deal emerged after Iran and Israel halted attacks following a US appeal, pushing oil prices lower and temporarily easing inflation concerns, though uncertainty lingers.

Silver rose above $68 an ounce on Tuesday after Iran and Israel agreed to halt attacks against each other, alleviating fears of a wider escalation that raises energy-driven inflationary risks. President Donald Trump also said both sides were seeking an immediate ceasefire and that final negotiations were moving forward. Still, silver remained near its lowest level since late March as the dollar and Treasury yields rallied following stronger-than-expected US jobs data, reinforcing expectations that the Federal Reserve could raise interest rates by year-end. Markets are now pricing in roughly a 70% chance of a quarter-point rate increase in December. Investors are also awaiting US CPI and PPI data later this week for fresh signals on the Fed’s policy outlook.

Silver erased earlier losses to rebound toward $69 an ounce on Monday, recovering from an over two-month low of $67.3 hit on Friday, as investors assessed the latest Middle East developments. Israel agreed to halt strikes on Iran at US President Donald Trump’s request but vowed to continue heavy bombing in Lebanon. Meanwhile, tensions escalated along the Israel-Lebanon border, with mutual shelling reported. Earlier, Trump had called for an immediate ceasefire, and Tehran paused its operations against Israel while warning against strikes on southern Lebanon. Rising oil prices, inflation worries and last week’s strong US jobs report boosted expectations of a Federal Reserve rate hike, with markets pricing in a 70% chance of a December hike, up from 45% a week ago, according to the CME FedWatch tool. Investors now await key inflation data, including Wednesday’s CPI and Thursday’s PPI, for further monetary policy clues.