Silver Heads for 20% Monthly Loss

Silver prices hovered around $58 an ounce on Tuesday, near their weakest level since December 2025, with losses exceeding 20% for both the month and the quarter, as a firm US dollar and expectations of US interest rate hikes continued to weigh on the metal. Rising energy prices, fueled by the Middle East conflict, have eliminated expectations of Federal Reserve rate cuts this year, with traders now pricing in a near 65% chance of a September hike. Although precious metals are traditionally seen as inflation hedges, higher interest rates tend to pressure non-yielding assets like silver. Focus now turns to upcoming US employment data, including nonfarm payrolls, and remarks by Fed Chair Kevin Warsh due Wednesday for signals on monetary policy. Meanwhile, investors are monitoring prospects for renewed US-Iran diplomacy, though Iran has dismissed reports of talks in Doha this week as unfounded.

Silver rose to around $59 an ounce on Tuesday, but was still 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 at least one rate hike by the Fed this year, with the first potentially coming as soon as September, while some investors are betting on additional hikes thereafter. 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.