FX.co ★ Silver Lacks Direction

Silver prices fluctuated around $80 per ounce on Monday, alternating between gains and losses, as a correction in global energy markets and a pullback in US Treasury yields eased immediate demand for inflation-hedging assets. The retreat in West Texas Intermediate crude toward $95 a barrel has reduced the urgency of the risk premium that had previously driven the rally in precious metals. This development is underscored by widespread expectations that the Federal Reserve will keep monetary policy restrictive at its meeting this week, thereby increasing the opportunity cost of holding non-yielding metals.

Even so, silver retains solid underlying support from a projected supply deficit of 67 million ounces in 2026 and sustained industrial demand, particularly from the electronics sector. Investors are weighing diminished concerns over energy supply against silver’s longer-term appeal as the conflict in the Middle East enters its third week, with markets positioning ahead of the Fed’s upcoming decision.