Spot Silver held near a 1-month high on Thursday on the back of a softer US Dollar and lower Treasury yields amid optimism about a potential end to the Middle East conflict.
US President Donald Trump said that he believed the war with Iran may be coming to a conclusion soon, while the White House expressed optimism about reaching a deal to end the conflict.
Moreover, reports suggested that there were growing prospects for a second round of peace talks between the US and Iran that could take place in a matter of days.
“The primary driver is the optimism about a U.S.-Iran ceasefire that is pushing down longer-term bond yields globally and that kind of created a lower opportunity cost of holding gold and silver,” Kelvin Wong, senior market analyst at OANDA, was quoted as saying by Reuters.
Optimism over diplomatic efforts to prolong the US-Iran ceasefire has been a central factor behind the recent softening of the US Dollar, which fell to a more than 1-month low.
A softer US Dollar makes dollar-priced Silver more appealing to international investors holding other currencies.
On the data front, US producer price figures released this week eased concerns over the inflationary impact of the war-driven surge in energy prices and tempered hawkish Fed expectations.
Markets are now pricing in a 29% chance of a 25 basis point Fed rate cut by year-end, compared to about 13% last week.
Silver was last up 0.98% on the day to trade at $79.70 per troy ounce.
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