XAG/USD falls to $75.10 as geopolitical risks in the Strait of Hormuz revive inflation concerns and hawkish central bank expectations.
Silver (XAG/USD) extended losses for a second day, trading near $75.10 per troy ounce in early European trading. The decline follows renewed tensions between the US and Iran, raising fears of supply disruptions in the Strait of Hormuz and potential energy-driven inflation shocks.
Market sentiment was further pressured by a dip in the US Consumer Confidence Index to 93.1 in May, down from an upwardly revised 93.8 in April. The drop reflects growing inflation anxieties tied to the escalating conflict, reinforcing expectations that central banks may keep interest rates elevated for longer.
Traders are closely monitoring the Federal Reserve’s monetary policy outlook, as silver’s non-yielding nature makes it sensitive to interest rate movements. The geopolitical fallout has overshadowed recent optimism over a potential US-Iran ceasefire, with both sides exchanging military actions in the past 24 hours.