Silver futures fell 4.8% Monday to $61.725, their lowest intraday level in over a month, after President Trump rejected Iran's proposal to reopen the Strait of Hormuz. The rejection pushed crude oil back above $100 a barrel and triggered a broad selloff in precious metals, compounded by last week's Federal Reserve rate hike and surging Treasury yields.
Trump's rejection of Iran's Hormuz proposal sparks the selloff
Silver futures slid 4.8% during Monday's session to trade at $61.725, their lowest intraday level in over a month. The drop followed President Trump's rejection of Iran's latest proposal — relayed through Qatari mediators at the United Nations General Assembly — to reopen the Strait of Hormuz and end the ongoing conflict. The rejection sent crude oil prices surging back above $100 a barrel, stoking fresh inflation concerns and triggering a broad selloff across precious metals.
Fed hike and rising yields deepen the pressure
The geopolitical shock compounded an already difficult backdrop for silver. The Federal Reserve delivered its first rate hike in three years last week, lifting the federal funds rate to 3.75%–4.00%. Markets are now pricing in roughly a 70% probability of another increase at the October meeting. U.S. Treasury yields climbed to fresh multi-decade highs, with the 10-year reaching 5.20% and the 2-year rising to 4.90%, while the dollar firmed, making silver, which pays no yield, comparatively less attractive to hold. Technical selling from forced liquidations of crowded speculative long positions amplified the move.
Gold and mining stocks slide alongside silver
The broader market reflected the same risk-off tone, with the S&P 500 off 0.5%, the Dow Jones down 0.5%, and the Nasdaq declining 0.7%. Silver mining equities were among the hardest-hit sectors, with several major names falling sharply in pre-market trading. Gold also tumbled alongside silver, though silver's additional exposure to industrial demand concerns pushed it to underperform gold on the day, given that a prolonged conflict could weigh on global economic activity.
Traders brace for this week's inflation and jobs data
Taken together, the mix of geopolitical escalation, surging energy prices, hawkish Fed expectations, and a strong dollar made Monday an especially difficult day for silver. With the PCE Price Index and the September Nonfarm Payrolls report due later this week, traders appear reluctant to hold long positions in the metal ahead of further potential catalysts for Fed tightening.
Source: Investing.com
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