FX.co ★ Silver Crashes 4% on Inflation Fears

Silver tumbled more than 4% to $72 per ounce on Tuesday, its lowest level since late March, as soaring oil prices and stalled US-Iran negotiations intensified inflation fears ahead of key central bank meetings. A US official confirmed that President Donald Trump rejected Iran’s latest proposal, quashing hopes for a swift resolution to the conflict that has roiled energy markets and fueled price pressures, thereby increasing the likelihood of higher interest rates. While precious metals are traditionally viewed as hedges against inflation, their appeal tends to diminish when rates rise, since they do not generate yield. The US Federal Reserve is widely expected to leave interest rates unchanged, in what could be Jerome Powell’s final meeting as chair, with investors closely scrutinizing any guidance on the future policy path. At the same time, the Bank of Japan kept rates on hold in a split decision, and other major central banks are also expected to pause this week while adopting a more hawkish tone, signaling the possibility of tighter policy ahead.