Silver prices (XAG/USD) are trading around $71.50 during Asian hours on Thursday, recovering from small losses the previous day and finding support as easing oil prices reduce inflation concerns and rate hike expectations. This stabilization is attributed to hopes for de-escalation in the Middle East, following ongoing talks between the US and Iran. The White House has confirmed that discussions are ongoing, with the Trump administration reportedly sending a 15-point proposal to Iran via Pakistan to resolve the conflict. However, senior Iranian officials have signaled reluctance to engage in talks with Washington, instead proposing a five-point plan that includes sovereign control over the Strait of Hormuz, and indicating they would reject a US ceasefire offer [1].
Despite these diplomatic efforts, traders remain cautious due to conflicting statements from both sides, which continue to unsettle financial markets. The US has also ordered the deployment of thousands of troops to the Middle East, raising concerns about a possible ground invasion. Earlier in the month, silver experienced significant selling pressure as surging energy prices, driven by disruptions linked to the Iran war, fueled inflation fears and prompted a hawkish shift among major central banks [1].
TD Securities strategists Oscar Munoz and Eli Nir note that the Federal Reserve faces mixed signals as the Iran conflict triggers an oil shock. They observe that the US economy remains uneven, with the Fed's dual mandate still in tension, and expect the Fed to remain on hold in the near term before potentially cutting rates later in 2026 if conditions permit [1].
Silver's safe-haven status and its sensitivity to geopolitical instability, inflation, and interest rate expectations continue to influence its price movements. The current market environment reflects cautious optimism, with traders monitoring developments in the Middle East and central bank policy signals [1].
CONCLUSION
Silver prices have stabilized near $71.50, supported by hopes for Middle East peace and easing oil prices, though ongoing geopolitical tensions and mixed Fed signals keep traders cautious. The market impact is medium, with investors closely watching diplomatic developments and central bank policy for further direction.