FX.co ★ Silver Remains Volatile

Silver traded below $90 per ounce on Tuesday after slumping nearly 5% in the previous session, remaining highly volatile and continuing to lag other safe-haven assets despite persistent fears of further escalation in the Middle East. The metal also faced additional downward pressure from a surging US dollar, which has emerged as the clear beneficiary as investors seek the reserve currency in response to sharply higher energy prices.

Interest rate expectations have shifted, with markets now projecting the next Federal Reserve rate cut for September, pushed back from earlier forecasts of July, though two 25-basis-point reductions are still fully priced in for this year. At the same time, the US military is expected to intensify strikes on Iran, with potential targets including missile production facilities, drones, and naval assets.

Heightening regional risk further, a senior Iranian official warned that ships attempting to pass through the Strait of Hormuz could be targeted. Tanker traffic in the area has effectively come to a standstill amid elevated security concerns, exacerbating market anxiety over energy supply and safe-haven flows.