FX.co ★ Silver Drops on US Blockade of Hormuz

Silver fell nearly 3% to below $74 an ounce on Monday, retracing part of last week’s gains as escalating geopolitical tensions raised fears of a deepening global energy crisis. The decline followed US plans to blockade the Strait of Hormuz after weekend talks with Iran collapsed, with no breakthrough on Iran’s nuclear program. The new restrictions, set to take effect at 10 a.m. Eastern Time, will apply only to vessels entering or leaving Iranian ports.

Negotiations in Pakistan failed to yield an agreement, with Washington accusing Tehran of refusing to limit its nuclear ambitions. Iran, in turn, reportedly sought control over the strategic strait, war reparations, a regional ceasefire, and access to its frozen overseas assets. The effective closure of this vital shipping corridor has sent energy prices sharply higher and heightened inflation risks, strengthening expectations that central banks may delay interest rate cuts or even resume tightening. This backdrop has pressured silver, which remains more than 20% lower since the conflict began.