Silver fell nearly 2% toward $68 per ounce on Monday, erasing gains from the previous session as the conflict in the Middle East entered its fifth week with no resolution in sight. Tensions escalated after Iran-backed Houthi militants in Yemen joined the fighting, launching attacks against Israel over the weekend. The group is also capable of targeting ships transiting the Red Sea as well as key Saudi Arabian energy infrastructure.
At the same time, the US military is reportedly preparing for weeks of ground operations in Iran following the deployment of additional troops to the region. Silver is now trading almost 30% below its March peak, as the recent oil price shock has heightened inflation concerns and strengthened expectations for further interest rate hikes by major central banks. Markets are currently pricing in the possibility of a Federal Reserve rate increase this year, a sharp reversal from previous expectations of two rate cuts.
