Spot Silver rebounded on Wednesday, tracking Gold, as the US extended a ceasefire with Iran, which eased concerns of an inflation surge, pushing oil prices lower by over 1%.
US President Donald Trump stated he would indefinitely extend the ceasefire with Iran so that further peace talks could take place.
However, Iran pushed back on that claim. Tasnim News Agency reported that Iran did not request an extension. As a result, uncertainty remains high.
At the same time, tensions continue over a US naval blockade of Iranian ports. Trump plans to keep the pressure on Tehran. In contrast, Iran demands the removal of the blockade before talks resume. Therefore, geopolitical risks remain elevated.
“If the ceasefire ends and hostilities resume, we will see the dollar strengthen, oil and interest rates go up and that should pressure prices,” Marex analyst Edward Meir was quoted as saying by Reuters.
High interest rates tend to increase the opportunity cost of holding Silver, which pays no interest.
Silver was last up 1.75% on the day to trade at $78.14 per troy ounce.
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