Silver Nears Two-Week High on Safe-Haven Demand

Silver climbed to $60 an ounce on Wednesday, its highest level since July 10, as safe-haven demand and technical buying gained momentum amid escalating Middle East tensions and ahead of next week's Federal Reserve meeting. Geopolitical concerns intensified after President Donald Trump warned of further strikes on Iran and pledged retaliation if Iran-backed Houthi rebels disrupt shipping through the Red Sea. Meanwhile, Secretary of State Marco Rubio said the US remains open to a deal with Iran but questioned whether Tehran is willing to accept terms acceptable to Washington. Despite the rally, silver remained below the record highs reached in January, as elevated oil prices have reinforced inflation concerns and expectations that the Federal Reserve may need to keep monetary policy restrictive. Markets currently price in two 25-basis-point rate hikes by March 2027, with about a 70% probability of the first increase coming as early as September.

Silver climbed above $59 an ounce on Wednesday, extending gains from the previous session as investors continued to monitor Middle East uncertainties and rising oil prices and their impact on inflation and interest rates. President Donald Trump downplayed the chances of near-term talks with Iran and warned of additional strikes, lifting oil prices. Iran-backed Houthi rebels in Yemen also disrupted shipping through the Red Sea, while a series of attacks on the Caspian Pipeline Consortium terminal along Russia’s Black Sea coast added to supply concerns. Meanwhile, ADP data showed US private employers added an average of 16,500 jobs per week over the four weeks ending July 4, down from an average weekly gain of 19,250 in the prior four-week period, marking a fourth straight slowdown in hiring. Markets widely expect the Federal Reserve to leave interest rates unchanged at next week’s meeting, while pricing in more than a 55% chance of a rate hike in September.

Silver jumped more than 4% to $59 an ounce on Tuesday as investors monitored diplomatic efforts to ease the US-Iran conflict and assessed the implications for oil prices, inflation, and the Federal Reserve’s policy path. Reports suggested mediators are working to restart negotiations between Washington and Tehran, with a possible 10-day truce being discussed to help secure shipping routes through the Strait of Hormuz. The recent escalation pushed oil prices to a more than one-month high, intensifying concerns over renewed inflationary pressures. Some US policymakers have argued that rates may need to stay elevated for longer, or even rise further, to contain inflation. While the Fed is expected to hold rates steady next week, markets are pricing in more than a 60% chance of a rate hike in September.