Silver prices (XAG/USD) rose for the second consecutive day, trading around $77.90 per troy ounce during Asian hours on Thursday, supported by optimism over a potential US-Iran agreement [1]. This optimism triggered a sharp drop in oil prices, which in turn eased inflation concerns and reduced expectations for prolonged hawkish central bank policies [1].
Despite the positive sentiment, Chicago Fed President Austan Goolsbee cautioned that inflation has not continued to moderate toward the Federal Reserve’s 2% target and has instead accelerated since the conflict began [1]. The BBC reported that Iran is still considering a US proposal to end the conflict, with the US having submitted a one-page memorandum of understanding to Iran that would gradually reopen the Strait of Hormuz and ease the American blockade on Iranian ports. Discussions regarding Iran’s nuclear program would follow later, though no final agreement has been reached [1].
Meanwhile, CNBC reported that US President Donald Trump warned Iran would face bombing “at a much higher level” if it refuses to agree to a peace deal. Trump stated that the US military campaign, dubbed Operation Epic Fury, “will be at an end” if Iran “agrees to give what has been agreed to” [1].
The market reaction to these developments has been a rise in silver prices, reflecting investor sentiment that easing geopolitical tensions and lower oil prices could reduce inflationary pressures and potentially lead to less aggressive central bank policy [1].
CONCLUSION
Silver prices have risen on hopes for a US-Iran agreement, which has eased inflation concerns and reduced expectations for prolonged hawkish central bank policies. However, uncertainty remains as no final agreement has been reached and inflation risks persist, according to Fed officials. The market is responding positively to the potential for de-escalation, but the outlook remains cautious.