Silver climbed to $73 per ounce on Tuesday, attracting some bargain hunting at lower levels, but remained headed for its steepest monthly decline in more than 14 years. The metal has fallen over 20% in March—its sharpest drop since September 2011—and is now trading nearly 40% below the record highs reached in late January.
The escalating conflict in the Middle East has disrupted global energy markets and heightened inflation risks, prompting investors and central banks to adopt a more hawkish stance on interest rates. With Iran maintaining its blockade of the Strait of Hormuz, the crisis has driven a sharp rise in oil prices, reinforcing expectations of tighter monetary policy.
Traders have now completely priced out US interest rate cuts in 2026, a stark reversal from pre-war projections that anticipated two cuts, despite Fed Chair Jerome Powell’s assurances that long-term inflation expectations remain anchored. In this environment, the US dollar has emerged as the dominant safe-haven asset, exerting significant downward pressure on silver and other precious metals.
