Silver off 13-year peak as Fed flags slower policy easing

Spot Silver pulled back from a fresh 13-year high of $37.31 on Thursday, after the Federal Reserve signaled slower monetary easing.

However, the Israel-Iran conflict has now entered its seventh day, supporting demand for safe-haven assets.

Iran’s Supreme Leader rejected US President Trump’s call for unconditional surrender, which triggered mass evacuations from Tehran amid more intense airstrikes by Israel.

Israel’s armed forces were reported to have struck over 20 targets in and around Tehran, including sites connected to Iran’s nuclear weapons development.

Media reports also stated that the US was considering taking part in Israel’s bombardment of Iran’s nuclear facilities – a move which could lead to a broader regional conflict.

The white metal also remains underpinned by robust industrial demand and persistent supply deficit. Silver is facing its fifth successive year of a structural market deficit, according to the Silver Institute industry association.

The metal plays a crucial role in solar energy, electronics and broader electrification efforts.

On the monetary front, the Fed kept its federal funds rate target range without change at 4.25%-4.50% at its June meeting, in line with market consensus.

Fed policy makers have taken a cautious stance to fully evaluate the economic impact of the Trump administration’s policies concerning tariffs, immigration and taxation.

The Federal Reserve still projects two interest rate cuts this year, despite slowing growth and persistent inflation pressures.

Yet, Fed policy makers slowed their overall outlook for rate cuts in light of a more challenging economic outlook.

“The U.S. Federal Reserve indicated that inflation risk remains high. So that reduces the chances of resuming the interest rate cuts,” ANZ Commodity Strategist Soni Kumari was quoted as saying by Reuters.

Spot Silver was last down 0.99% on the day to trade at $36.37 per troy ounce.