Silver slid to a fresh 2026 low near $55 on Friday, pressured by a firmer US Dollar and fears that escalating US-Iran tensions could squeeze global energy supply. Geopolitical threats to the Red Sea route added to the selling, even as bets on a Fed rate hike this month declined.
Silver dropped to a fresh Year-To-Date low as a firmer dollar and renewed geopolitical risk pulled the white metal lower. The price fell 0.8% to near $55.00 in early European trading on Friday, after touching $54.77 earlier in the day.
Energy supply fears drive the selloff
The metal faces intense selling pressure amid concern that global energy supply could tighten further. According to Reuters, Iran asked Yemen's Houthi militia to stand ready to close the Red Sea oil route if the United States strikes Iranian power infrastructure, adding a fresh threat to supply already strained by US-Iran military tension near the Strait of Hormuz.
That threat responds to US President Donald Trump's warning, in a Fox News interview, that he will authorize attacks on Iranian bridges and power plants if Tehran refuses to negotiate. Fears of higher oil prices could keep inflation projections de-anchored, a scenario that pushes central banks to tighten policy and erodes the appeal of non-yielding assets such as silver.
Dollar strength weighs on the metal
A firmer greenback added to the pressure, driven by concern that US inflation could re-accelerate on higher energy costs after cooling in June. The US Dollar Index (DXY) traded 0.1% higher near 100.80, and a stronger dollar makes silver an unfavorable risk-reward bet for investors.
Softer US CPI data has kept hawkish Fed expectations muted, yet that has not been enough to lift the metal. The odds of a Fed rate hike this month have dropped to 10.2% from 24.6% a week earlier, according to the CME FedWatch tool.
Weakness spreads to physical markets
The decline reached physical markets too. In Mumbai, silver fell to ₹230 per gram, down ₹5 from the previous session, with the kilogram rate down ₹5,000 to ₹2,30,000. The move followed several steady sessions before the metal turned lower on Friday.
On the futures side, silver closed near 55.77, holding just above nearby support that some analysts flag as a potential reversal zone if buyers step back in.
Sources: FXStreet, HDFC Sky, Investing.com
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