Sliver Falls on US-Iran Escalations

Silver fell toward $58 an ounce on Wednesday, trimming gains from the previous session as escalating tensions in the Middle East kept inflation and interest rate concerns at the forefront of investors' minds. The US launched another round of strikes against Iran while reinstating its naval blockade of Iranian ports near the Strait of Hormuz, raising fears of further disruptions to global energy supplies. Gold had surged more than 1% on Tuesday after softer-than-expected US inflation data prompted traders to scale back expectations for near-term Federal Reserve interest rate hikes. Meanwhile, Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability during congressional testimony but stopped short of signaling a more hawkish policy stance. Even so, markets continue to price in roughly a 50% chance of a Fed rate hike in September..

Silver eased toward $58 an ounce on Wednesday but held most of the gains from the previous session, as softer-than-expected US inflation data prompted traders to dial back expectations for Federal Reserve interest rates hikes. The annual US inflation rate slowed to 3.5% in June from 4.2% in May, coming in below forecasts of 3.8% as lower oil prices helped ease energy-related inflation. Consumer prices also fell 0.4% from the previous month, marking the first monthly decline since 2020. Meanwhile, Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability during congressional testimony on Tuesday but refrained from signaling a more aggressive policy stance. Markets continue to price in roughly a 50% chance of a Fed rate hike in September, as renewed tensions between the US and Iran lifted oil prices and kept inflation concerns firmly on investors’ radar.

Silver rose nearly 2% to $58.9 an ounce on Tuesday after weaker-than-expected US inflation data dampened expectations for Federal Reserve rate hikes. The headline CPI fell to 3.5% in June, driven by slowing energy inflation, while the core rate unexpectedly eased to 2.6%, both below forecasts. Month-over-month, the CPI dropped 0.4%, its first decline since 2020. Still, annual rates remain well above the Fed’s target. Investors now await Federal Reserve Chair Kevin Warsh’s first congressional testimony for signals on a potential September hike. Money markets still price in an over 50% chance of a quarter-end rate increase, particularly amid renewed US-Iran tensions. President Donald Trump announced plans to reinstate a blockade on Iranian vessels in the Strait of Hormuz and sought compensation from nations benefiting from US security efforts in the region.