Silver is tumbling sharply Thursday, falling 1.85% toward $56.70 as escalating US-Iran tensions drive energy prices higher and reignite inflation concerns. The precious metal is facing heavy selling pressure as crude oil’s rally intensifies fears that central banks will maintain elevated interest rates for longer than markets previously anticipated. Higher energy costs threaten to keep inflation sticky, reducing the appeal of non-yielding assets like silver while strengthening the case for restrictive monetary policy.
The white metal’s decline reflects broader market anxiety about the inflation outlook, with geopolitical risks in the Middle East adding fresh uncertainty to an already fragile economic picture. Traders are repositioning ahead of potential rate decisions, with silver particularly vulnerable given its industrial demand component alongside its safe-haven characteristics. The dual nature of silver makes it sensitive to both growth concerns and inflation expectations.
FXnCO Insight
Traders should watch crude oil levels closely, as sustained energy price increases above key technical thresholds could trigger further silver downside and reshape central bank rate cut expectations across major economies.
Source: FXStreet