Silver Extends Decline

Silver fell toward $57 per ounce on Friday after falling more than 3% in the previous session, as surging oil prices fueled by the escalating Middle East conflict strengthened the case for tighter US monetary policy. President Donald Trump threatened broader military action against Iran and said Tehran would be held responsible for any future Houthi attacks on Red Sea shipping, helping propel Brent crude above $100 a barrel for the first time since May. The jump in oil prices stoked inflation concerns, reinforcing expectations of tighter Fed policy and weighing on non-yielding assets. Markets now see a 34% chance of a rate hike next week, with the probability of a September increase exceeding 81%. Separately, fresh US tariffs of 10%–12.5% on imports from major trading partners added to market uncertainty. Despite the recent pullback, silver remained on track for a weekly gain.

Silver prices fell below $59 per ounce on Thursday, retreating from two-week highs as escalating tensions in the Middle East drove oil prices higher and reinforced expectations that the US Federal Reserve may raise interest rates later this year. The Iran-backed Houthis claimed responsibility for attacks on two Saudi oil tankers as part of a naval blockade, raising concerns over a new chokepoint for global crude supplies. At the same time, the US launched a 12th consecutive night of strikes on Iran, prompting further retaliation and heightening fears of prolonged disruptions to Gulf energy exports. The surge in oil prices has intensified inflation concerns, strengthening expectations that the Fed will keep monetary policy tighter for longer. Higher interest rates typically reduce the appeal of non-yielding assets such as silver. Money markets are currently pricing in about a 78% probability of a Fed rate hike in September.

Silver fell toward $59 per ounce on Thursday, easing from a nearly two-week high, as escalating Middle East tensions pushed oil prices higher. Iran-backed Houthi militants said they targeted two Saudi oil tankers in the Red Sea, increasing fears of wider disruptions to global energy flows, while President Trump warned of strikes on Iranian infrastructure if vessels passing through the Strait of Hormuz come under attack. The escalation pushed crude prices to six-week highs, keeping inflationary pressures elevated and fueling expectations that interest rates could stay higher for longer. Attention now turned to next week’s Federal Reserve meeting, with policymakers expected to leave rates unchanged. Still, markets continue to see the possibility of further tightening later this year, pricing in a 61% chance of a September rate hike. Elsewhere, India’s silver imports have slowed sharply as a new licensing regime disrupted shipments, driving local premiums to multi-month highs.