Silver slumps as Hormuz tensions ignite inflation fears

Silver retreated sharply as escalating tensions between United States and Iran in the Strait of Hormuz drove oil prices higher, intensifying global inflation concerns and reducing the metal?s appeal. While geopolitical risks typically support safe-haven assets, the current environment is instead boosting the US dollar, which has strengthened on rising uncertainty and capital flows, putting pressure on dollar-denominated commodities like silver. Additionally, fears of a prolonged energy supply disruption have increased expectations that central banks may maintain or tighten their policy stance, further weighing on non-yielding assets. Reflecting this global weakness, MCX silver futures saw a sharp decline, with prices falling below ₹2,52,000 per kg. With volatility elevated and uncertainty surrounding diplomatic progress still high, silver is likely to remain under pressure in the near term unless there is a meaningful easing in geopolitical tensions or a pullback in the dollar.

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