XAG/USD declines amid geopolitical tensions and inflation concerns, pressuring expectations for prolonged tight monetary policy.
Silver prices fell to $76.40 per troy ounce in Asian trading on Tuesday, retreating from recent gains as US strikes in southern Iran heightened geopolitical risks. The military action targeted missile sites and Iranian vessels near the Strait of Hormuz, raising fears of energy-driven inflation and tighter monetary policy.
The decline follows a rebound in oil prices, which could exacerbate inflationary pressures and increase the likelihood of further interest rate hikes. Markets had previously priced in potential rate cuts, but escalating tensions may delay such moves.
Diplomatic efforts are underway to extend a ceasefire by two months, which could ease tensions if finalized. A deal would involve lifting a US maritime blockade and reopening the Strait of Hormuz, a critical chokepoint for global oil supplies.