Silver Holds Losses on Hawkish Fed Bets

Silver held around $54 an ounce on Monday, hovering near its lowest level in eleven months as investors weighed escalating geopolitical tensions in the Middle East and prepared for key central bank decisions this week. The Trump administration is weighing whether to pursue a deal with Iran or resume military strikes following next week’s midterm elections, amid growing threats to Americans across the region. Tehran is reportedly ready to retaliate, potentially targeting Israel and the UAE. The Middle East conflict has driven energy prices sharply higher this year, fueling inflation concerns and strengthening expectations of higher interest rates, which tend to pressure non-yielding assets such as precious metals. Meanwhile, the Federal Reserve is widely expected to leave interest rates unchanged this week, before potentially raising them in December. Central banks in the Eurozone and Japan are also anticipated to maintain their current interest rates.

Silver prices tumbled below $54 an ounce on Friday, reaching their lowest level since November 2025 as rising oil prices strengthened expectations that US interest rates will remain higher for longer. Brent crude climbed to a four-year high after Houthi attacks in Saudi Arabia heightened concerns over further energy supply disruptions. Meanwhile, hotter-than-expected US consumer and producer inflation data last week, largely driven by rising energy costs, reinforced the case for tighter monetary policy. However, the Fed is widely expected to leave rates unchanged at its October 27–28 meeting. Markets currently price in just a 10% chance of a rate hike next week, compared with 80% for December, according to CME’s FedWatch Tool. Investors are also awaiting US PCE inflation data on October 29 for further clues on progress towards the Fed’s 2% target.

Silver prices fell to around $54 an ounce on Friday, hitting their lowest levels since November 2025 as a deepening selloff in technology and artificial intelligence stocks prompted traders to liquidate precious metals to cover losses in other assets. The broader equity downturn intensified this week after Meta Platforms’ plans to increase capital expenditure reignited concerns that technology companies may take on additional debt to fund the AI buildout. Silver also remained under pressure from rising oil prices, which heightened inflation concerns and strengthened expectations that interest rates could stay elevated for longer. However, growing doubts about the sustainability of AI investments, a key driver of US economic growth, prompted markets to scale back expectations for further Federal Reserve rate hikes, potentially providing some support for precious metals.