Silver (XAG/USD) extends its rally on Monday and trades around $84.85 at the time of writing, up 5.60% on the day.
The white metal continues its bullish momentum, breaking to fresh two-month highs, supported by strong safe-haven demand amid escalating geopolitical tensions in the Middle East
Market sentiment remains dominated by concerns surrounding the war between the United States (US) and Iran. US President Donald Trump rejected Iran’s latest peace proposal, calling it “totally unacceptable,” while negotiations regarding the Strait of Hormuz remain deadlocked. Fears of prolonged disruptions to global energy flows continue to fuel volatility across commodity markets and support safe-haven assets such as Silver.
At the same time, rising energy prices are reviving inflation concerns and pushing investors to price in a higher-for-longer interest rate environment. Data released on Friday in the United States reinforced this narrative after Nonfarm Payrolls (NFP) increased by 115K in April, well above market expectations of 62K, while the Unemployment Rate remained steady at 4.3%. These figures give the Federal Reserve (Fed) greater room to maintain its restrictive monetary policy stance.