Spot Silver extended losses on Friday and was on course for a weekly fall amid stalled US-Iran peace negotiations, while elevated oil prices kept inflation concerns alive.
The Strait of Hormuz has remained largely closed despite the Iran ceasefire extension, which translated into tighter oil flows, keeping prices high.
According to a Bloomberg report, the US military intercepted two Iranian oil supertankers that were attempting to circumvent its blockade. The report indicated that Washington was intensifying efforts to restrict Iran’s shipping activities, while Tehran continued to issue threats against vessels passing through the Strait of Hormuz.
US military officials were also reported to be preparing contingency options to strike Iran’s capabilities in the key waterway in case the current ceasefire breaks down.
US President Donald Trump said that if Iran fails to move its oil, its infrastructure would be targeted. At the same time, Iranian officials rejected claims that they had agreed to extend the truce and accused the US of violating it by maintaining a naval blockade on Iran’s trade.
Elevated energy costs have added to global inflation expectations and kept central bank policy makers wary of adopting a more dovish stance. In turn, the reduced probability of near-term interest rate cuts by central banks weighed on non-interest-bearing Silver.
Spot Silver was last down 0.76% on the day to trade at $74.83 per troy ounce.
A firmer US Dollar and higher US Treasury yields also pressured the white metal, which eyed a 7.35% weekly loss.
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