The price of silver drops to a new year-to-date low of $54.77 due to concerns about the US-Iran war being worse.
If the US attacks Iranian infrastructure, Iran threatens to shut down the Red Sea.
Concerns that rising energy costs could spur US inflation again cause the US dollar to rise.
During Friday's early European trading session, the price of silver (XAG/USD) is down 0.8% to over $55.00. Earlier in the day, the white metal recorded a new Year-To-Date (YTD) low of $54.77. Following Iran's threats to close the Red Sea, the asset is under tremendous selling pressure due to concerns that the world's oil supplies may be further constrained.
Iran asked Yemen's Houthi militia to be prepared to block the Red Sea oil route in the event that the United States (US) attacks Iranian power infrastructure during the day, posing a new threat to the world's energy supply, which is already under pressure from US-Iranian military aggression near the Strait of Hormuz, according to Reuters.
Iran's threat to close the Red Sea is a reaction to US President Donald Trump's warning in an interview with Fox News that if Tehran does not show up for talks, he will allow forces to destroy Iranian power installations and infrastructure.
Inflation estimates would remain de-anchored due to fears of a further rise in oil prices brought on by worries about the energy supply. This would push central banks to tighten monetary conditions, which would ultimately reduce the appeal of non-yielding assets like silver.
The price of silver is also being impacted by a modest increase in the US dollar due to concerns that US inflation may pick up speed again as a result of rising energy costs after declining in June. The US Dollar Index (DXY), which compares the value of the US dollar to six other major currencies, is currently trading 0.1% higher at about 100.80. In theory, an increase in the US dollar renders the price of silver an unfavorable risk-reward wager for investors.
Nonetheless, the drop in hawkish Fed wagers brought on by the weak US CPI data is still present. The likelihood that the Fed will raise interest rates at its meeting later this month has drastically decreased from 24.6% a week ago to 10.2%, according to the CME FedWatch tool.
If the US attacks Iranian infrastructure, Iran threatens to shut down the Red Sea.
Concerns that rising energy costs could spur US inflation again cause the US dollar to rise.
During Friday's early European trading session, the price of silver (XAG/USD) is down 0.8% to over $55.00. Earlier in the day, the white metal recorded a new Year-To-Date (YTD) low of $54.77. Following Iran's threats to close the Red Sea, the asset is under tremendous selling pressure due to concerns that the world's oil supplies may be further constrained.
Iran asked Yemen's Houthi militia to be prepared to block the Red Sea oil route in the event that the United States (US) attacks Iranian power infrastructure during the day, posing a new threat to the world's energy supply, which is already under pressure from US-Iranian military aggression near the Strait of Hormuz, according to Reuters.
Iran's threat to close the Red Sea is a reaction to US President Donald Trump's warning in an interview with Fox News that if Tehran does not show up for talks, he will allow forces to destroy Iranian power installations and infrastructure.
Inflation estimates would remain de-anchored due to fears of a further rise in oil prices brought on by worries about the energy supply. This would push central banks to tighten monetary conditions, which would ultimately reduce the appeal of non-yielding assets like silver.
The price of silver is also being impacted by a modest increase in the US dollar due to concerns that US inflation may pick up speed again as a result of rising energy costs after declining in June. The US Dollar Index (DXY), which compares the value of the US dollar to six other major currencies, is currently trading 0.1% higher at about 100.80. In theory, an increase in the US dollar renders the price of silver an unfavorable risk-reward wager for investors.
Nonetheless, the drop in hawkish Fed wagers brought on by the weak US CPI data is still present. The likelihood that the Fed will raise interest rates at its meeting later this month has drastically decreased from 24.6% a week ago to 10.2%, according to the CME FedWatch tool.
