Silver Rises Despite Stronger Dollar as Middle East Tensions Persist

Silver climbed to $66.6 on Monday, its highest level since September 10, despite a stronger US dollar as investors continued to monitor developments in the Middle East. Oil prices extended their decline at the start of the week, easing concerns over prolonged inflationary pressures as markets looked for signs of diplomatic progress on the Iran conflict around this week’s UN meetings. However, tensions remained elevated as Iran and the US exchanged fresh threats on Sunday. Meanwhile, traders are pricing an 88% probability of a US rate increase by December, according to the CME FedWatch Tool. Last week, both the Federal Reserve and Bank of Japan raised interest rates and signaled further tightening, following a similar move by the ECB earlier this month.

Silver eased toward $66 an ounce on Monday, ending a two-day winning streak as investors continued to track developments in the Middle East and assess their potential impact on inflation and interest rates. Oil prices fell for a fourth straight session amid signs of increased diplomatic efforts to resolve the Middle East conflict and restore energy flows from the region. President Donald Trump said he would “probably” be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly this week, where he could also hold talks with other Persian Gulf leaders. Meanwhile, investors are awaiting several appearances by Federal Reserve officials this week after the central bank raised rates last week for the first time in three years. On Sunday, Minneapolis Fed President Neel Kashkari said inflation remains too high and that price pressures have expanded beyond the initial oil-price shock linked to the Iran war.

Silver climbed to around $66 an ounce on Friday, its highest level in more than a week, as falling oil prices eased concerns over persistent inflationary pressures. Gains were limited by a stronger dollar, which remained supported after the US Federal Reserve raised rates by 25 bps on Wednesday and signaled further increases in the coming months. Markets are now pricing in a nearly 60% chance of another rate hike next month. The Bank of Japan also raised rates to a 31-year high and signaled that further tightening remains possible. Meanwhile, Brent crude fell for a third consecutive session, as easing concerns over Saudi supply disruptions outweighed fears of a broader escalation of the Middle East conflict.