Spot Silver fell more than 0.5% on Monday, tracking Gold, being weighed down by a firmer US Dollar and scaled back expectations of Federal Reserve interest rate cuts.
The US Dollar Index held near a more than three-month high of 99.695. A firmer dollar makes dollar-priced Silver less appealing to international investors holding other currencies.
Oil prices soared past $100 per barrel for the first time since 2022, as supply disruptions intensified, sparking fears over renewed inflation globally. With oil tankers effectively blocked from the Strait of Hormuz, several Middle East oil producers had to curb output.
The Strait of Hormuz is a crucial route for nearly one-fifth of global oil shipments.
Danske Bank’s analysts warned that oil prices could rise further due to escalating war risk, with any restart of shipments potentially triggering a reversal.
Rising energy prices could complicate the Federal Reserve’s policy outlook, while adding to expectations that the central bank may delay rate cuts. Investor expectations for the next Fed rate cut have now been pushed back to September or October.
Spot Silver was last down 0.56% on the day to trade at $84.07 per troy ounce.
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