Silver prices (XAG/USD) rose sharply on Monday, trading at $59.43 per troy ounce according to FXStreet data, marking a 2.26% increase from Friday's price of $58.12 [1]. Source 2 reports a similar figure, with Silver trading around $59.45, up 2.27% on the day [2]. Despite this rally, Silver prices have decreased by 16.39% since the beginning of the year [1].
The surge in Silver is attributed to renewed hopes for de-escalation between the United States and Iran, following statements from US Ambassador to the United Nations Mike Waltz that President Donald Trump decided to suspend military strikes to allow more time for diplomacy. An Iranian official also indicated that Tehran would halt its attacks as long as Washington does the same [2]. This pause in military tensions has led to a sharp decline in Oil prices, with West Texas Intermediate (WTI) falling by nearly 8% at the time of press [2]. Lower energy prices are easing inflation concerns and reducing the likelihood of further monetary tightening, which supports non-yielding assets like Silver [2].
Additional support for Silver comes from lower US Treasury yields and a weaker US Dollar, as investors scale back expectations for further interest rate hikes amid fading inflation risks linked to energy prices [2]. The Gold/Silver ratio stood at 68.93 on Monday, down from 69.73 on Friday, indicating a relative strengthening of Silver compared to Gold [1].
Market participants are now focused on the upcoming Federal Reserve monetary policy decision scheduled for Wednesday. The Fed is widely expected to leave interest rates unchanged, but investors will closely monitor the policy statement and Chair Jerome Powell's remarks for guidance on future monetary policy direction [2].
CONCLUSION
Silver rallied over 2% on Monday, driven by US-Iran de-escalation and falling Oil prices, which eased inflation concerns and supported safe-haven assets. The market is now awaiting the Federal Reserve's policy decision for further cues. Overall, the event has had a high impact on Silver prices and investor sentiment.