silver extended its advance for a second straight session on Monday, trading near $76 an ounce during Asian hours. The metal benefited from renewed demand for defensive assets as hopes for a breakthrough in US–Iran negotiations faded.
The deterioration in diplomatic prospects followed Washington’s decision to cancel a planned delegation to Pakistan, where indirect discussions with Tehran had been expected to continue. President Donald Trump signaled that Iran had made some progress but not enough, while Tehran responded that it would not enter negotiations under coercion or blockade. The setback has reinforced market concerns that tensions could remain elevated for longer.
At the same time, restrictions on traffic through a strategically important waterway remain in place, adding to fears of wider supply disruptions. That backdrop has helped keep crude oil prices firm, which in turn has supported demand for safe-haven metals such as silver .
Still, rising energy costs also create a more difficult environment for the white metal. Higher oil prices tend to feed inflation expectations, and that may encourage central banks to remain cautious about easing policy too quickly. Because silver does not generate interest, its appeal can weaken when investors expect rates to stay elevated for longer.
Market attention is also focused on the Federal Reserve, which is expected to leave rates unchanged at its upcoming meeting. Policymakers are widely seen as favoring a gradual approach to rate cuts under incoming Chair Kevin Warsh. Investors will scrutinize the Fed’s statement and press conference for signs that higher energy prices are influencing the outlook for inflation and the timing of future rate reductions.The US Dollar Index eased to around 98 on Monday in early Asian trading, as investors reacted to signs of possible de-escalation in the Middle East. The index, which tracks the dollar against a basket of six major currencies, edged lower after reports that Iran had put forward a proposal to the United States aimed at reopening the Strait of Hormuz and ending the conflict.
According to the report, the proposal included a delay in nuclear negotiations and an extension of the current ceasefire, with the broader goal of creating conditions for a permanent end to hostilities. Markets often treat reduced geopolitical risk as a negative for the dollar, particularly when safe-haven demand begins to fade.
The latest developments follow comments from US President Donald Trump, who reportedly instructed Jared Kushner and Steve Witkoff to cancel a planned trip to Pakistan, which has been involved in mediation efforts. He said Iran had made some concessions, but not enough to secure a deal.
Attention is now shifting to the Federal Reserve’s interest rate decision due later this week. Policymakers are widely expected to leave the federal funds rate unchanged at 3.50% to 3.75%, where it has remained since January. Traders will focus less on the decision itself and more on the tone of the accompanying statement and any updated guidance on inflation and growth.
Some analysts say the dollar could regain ground if the Fed strikes a more hawkish tone. Persistent energy-driven inflation, if linked to rising oil prices and broader supply concerns, may push markets to reassess the outlook for future policy easing. That could lend support to the US currency, even as geopolitical tensions and risk sentiment continue to influence near-term moves.
