XAG/USD drops 0.8% to near $55.00 as Iran threatens to disrupt Red Sea oil routes, pressuring non-yielding assets.
Silver (XAG/USD) fell 0.8% to $55.00 in early European trading Friday, reaching a year-to-date low of $54.77. The decline follows heightened geopolitical tensions after Iran warned it may close the Red Sea, disrupting global energy supplies.
The threat escalates concerns over oil price surges, which could sustain inflation and prompt central banks to maintain tighter monetary policies. Non-yielding assets like silver lose appeal in such environments. The US Dollar Index (DXY) also rose 0.1%, further weighing on the metal.
Iran’s warning comes in response to US threats of strikes on Iranian infrastructure if negotiations fail. The Strait of Hormuz remains a flashpoint, exacerbating supply risks.