Silver Set for Sharp Monthly Decline

Silver fell toward $57 an ounce on Tuesday toward its lowest levels in seven months, and was on track for a sharp monthly drop amid Middle East uncertainties and expectations that the US Federal Reserve will raise interest rates this year. The precious metal has declined more than 23% this month and roughly the same this quarter. Markets continue to price in three Federal Reserve rate hikes this year, with the first move potentially coming in September. Investors are now awaiting the latest US monthly employment report for fresh clues on the policy outlook. Meanwhile, US and Iran are scheduled to resume peace talks in Doha, Qatar later today, although prospects for a lasting ceasefire remain unclear. A major sticking point remains after Tehran reiterated its plan to oversee traffic through the Strait of Hormuz even if Oman decides not to take part.

Silver fell toward $58 an ounce on Monday, hovering near its lowest level since December 2025 and on track for a monthly drop of over 20%, as uncertainty surrounding US-Iran peace talks has heightened inflation concerns and strengthened expectations of Federal Reserve interest rate hikes. The US and Iran agreed to halt Gulf hostilities and resume negotiations over the Strait of Hormuz. US President Donald Trump disclosed that Tehran requested a meeting with an American delegation in Qatar on June 30, following Iran’s missile and drone attacks on US military sites in Kuwait and Bahrain. Trump had previously warned Iran of severe repercussions if it failed to uphold a peace deal. Like gold, silver, often seen as an inflation hedge, loses its appeal in high-rate environments due to its lack of yield. Markets are now pricing in three Fed rate hikes this year, with a 60% probability of a September increase. Investors are also awaiting critical US jobs data later this week.

Silver fell to around $58.5 an ounce on Monday, snapping a two-day rebound as renewed exchanges of attacks between the US and Iran over the Strait of Hormuz lifted oil prices and rekindled inflation concerns. The conflict escalated since Thursday, with Iran targeting a container ship, a vessel carrying Qatari oil, and military bases in Kuwait and Bahrain, prompting multiple US retaliatory strikes. However, both sides later agreed to suspend further attacks ahead of peace talks set to resume this week in Doha, Qatar. Meanwhile, data last week showed US PCE inflation broadly matched expectations, leading investors to slightly pare back bets on Federal Reserve rate hikes this year. Markets are now awaiting the latest US monthly jobs report and the ISM Manufacturing PMI for further clues on the outlook for monetary policy.