Silver edged lower on Thursday, easing 0.49% to around $78.60 per ounce, as market caution intensified ahead of key developments in negotiations between the United States and Iran. The metal, still hovering near recent highs, came under pressure as expectations of prolonged talks reduced immediate demand for safe-haven assets.
Analysts say near-term moves in silver remain closely tied to the trajectory of the U.S.–Iran dialogue and to swings in global energy prices, both of which are shaping sentiment toward non-yielding assets.
Ceasefire extension talk lifts risk appetite, but key gaps remain
Diplomatic sources signaled that Washington and Tehran are considering extending the current ceasefire to allow further discussions, briefly improving global risk appetite. Yet significant disagreements, particularly on nuclear-related issues, continue to cloud the outlook for a swift, durable agreement.
The fragile backdrop has kept metals trading subdued, with market participants avoiding aggressive positioning while geopolitical risks remain elevated.
Strait of Hormuz tensions support oil, feed inflation worries
Persistent tensions in the Strait of Hormuz are disrupting energy flows and keeping crude prices elevated, even after minor pullbacks. Brent crude futures have been trading near $95 per barrel, and the U.S. Energy Information Administration now projects an average Brent price of $96 per barrel in 2026, with a potential peak close to $115 in the second quarter.
Higher energy costs are already feeding through to economic data. U.S. inflation for the 12 months to March climbed to 3.3%, up sharply from 2.4% in February. The gasoline index surged 21.2% over the month, illustrating the direct impact of geopolitical stress on consumer prices.
Fed signals prolonged restrictive policy stance
Rising energy-driven inflation is complicating the Federal Reserve’s policy path. Officials have indicated that current interest rates may need to stay in restrictive territory for longer to contain price pressures.
St. Louis Fed President Musalem said ongoing supply shocks could keep core inflation near 3% through year-end. He argued that the current policy rate range remains appropriate in light of recent developments in oil and labor markets and suggested the central bank may need to hold rates around 3.50%–3.75% for an extended period to assess the full impact of high energy prices.
A sustained period of higher borrowing costs typically weighs on appetite for high-growth, higher-risk assets that are sensitive to liquidity conditions.
Silver rebounds above $80 as optimism returns
Since the initial pullback, silver has rebounded, breaking above $80 per ounce to its highest level in about a month as cautious optimism around the diplomatic process resurfaced. The sharp move underscores how flows into perceived stores of value are tracking headlines from the negotiations in real time.
With the two-week ceasefire set to expire on April 21, reports of progress toward a framework agreement—despite major unresolved issues—have fueled volatility. Algorithmic strategies and large-scale market participants have been rapidly adjusting exposure in response to shifts in perceived geopolitical risk. Periods of optimism have triggered “risk-on” behavior, while any sign of a breakdown in talks has the potential to send capital back toward cash and government bonds.
Structural silver deficit adds support to prices
Beyond geopolitics and macro policy, underlying market fundamentals are lending additional support to silver. Global demand is projected to exceed supply by roughly 50 million ounces in 2026, which would mark the sixth consecutive year of a market deficit.
This persistent shortfall, combined with elevated energy prices and an uncertain diplomatic backdrop, is expected to keep silver trading sensitive to both geopolitical headlines and central bank guidance in the sessions ahead.
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