Silver Tumbles as Rate Outlook Weighs on Metals Market

TradingKey - Spot silver (XAGUSD) slumped as much as 6% on Thursday morning GMT, erasing the previous day’s rebound and trading around $68.1 an ounce by 9 a.m. GMT. The sharp decline reflected renewed investor concern over the global interest‑rate outlook.

Wednesday’s advance had been driven by reports that the U.S. and Iran were holding talks—raising hopes for a de‑escalation in regional tensions. The prospect of easing geopolitical risks briefly fueled expectations that surging oil prices might stabilize, allowing inflation pressures built up from the previous rally to dissipate. Analysts suggested that if the conflict cools, much of the inflationary momentum could unwind.

That optimism, however, proved short‑lived. Prices resumed their slide on Thursday as traders shifted focus back to whether U.S. interest rates are finally set to decline.

Ongoing turmoil in the Middle East remains a dominant influence on global rate expectations. Any renewed threat to energy supply could add to inflation pressures, discouraging the Federal Reserve from cutting rates and even reviving speculation of higher yields. Against this backdrop, silver continues to attract investors seeking liquidity—especially those holding long positions as a hedge against market volatility.