Spot Silver pulled back from a 1-month high on Monday, in unison with Gold, on the back of a firmer US Dollar, as reports the Strait of Hormuz has been closed again drove oil prices higher, stoking inflation concerns and adding to prospects of further central bank interest rate hikes.
Heightened tensions in the key shipping corridor weighed on market sentiment. According to Bloomberg, Iran’s military claimed that the United States breached an existing ceasefire by opening fire on one of Iran’s commercial vessels.
Tehran warned that it would soon retaliate against what it labeled as maritime aggression by US forces.
US President Donald Trump confirmed that the US Navy had fired upon and seized an Iranian-flagged cargo ship in the Gulf of Oman. The vessel was taken after it allegedly failed to comply with orders to halt while exiting the Strait of Hormuz.
Additionally, Tehran has refused to resume talks with US officials, citing “unrealistic expectations,” among other reasons.
A firmer US Dollar makes dollar-priced Silver less appealing to international investors holding other currencies.
Spot Silver was last down 1.79% on the day to trade at $79.33 per troy ounce.
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