FX.co ★ Silver Drops on Strong Dollar, Yields

Silver fell more than 5% to below $85 per ounce on Tuesday, extending the previous session’s slide as a stronger US dollar and rising Treasury yields outweighed demand for traditional safe-haven assets. The greenback advanced as investors moved into the reserve currency amid surging energy prices linked to the conflict in the Middle East. Higher fuel costs have also intensified inflation concerns, driving bond yields up as markets reassess the outlook for Federal Reserve policy.

Expectations for the Fed’s next interest rate cut have been pushed back to September from earlier forecasts of July, though markets still anticipate two reductions of 25 basis points each. At the same time, the US military is expected to escalate strikes on Iran, with potential targets including missile production facilities, drones, and naval assets. A senior Iranian official warned that vessels attempting to transit the Strait of Hormuz could come under attack, effectively halting tanker traffic amid elevated security risks.