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28/07/26
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Silver Edges Lower as Middle East Tensions Ease
Silver prices eased in Asian trading on Tuesday after posting modest gains in the previous session, with the metal hovering near $58 an ounce. The pullback came as markets weighed signs that tensions in the Middle East may be easing, a development that has helped push oil prices lower and reduced immediate fears of a new inflation shock.
The prospect of lower energy costs has supported expectations that the Federal Reserve may have less urgency to tighten policy further in the near term. For non-yielding assets such as silver, the outlook for rates remains a key driver. When investors anticipate a slower pace of monetary tightening, demand for precious metals often improves because the opportunity cost of holding them falls.
Market attention has also focused on diplomatic efforts involving the US and Iran. Donald Trump said talks were progressing, but also warned that military action could resume if negotiations fail. The remarks followed a halt in US strikes late last week after nearly two weeks of hostilities, while Iran also stopped retaliatory attacks on US targets in neighboring countries.
Washington’s decision to pause its strike campaign over the weekend marked several consecutive days without fresh attacks. At the same time, Iranian officials rejected the idea that direct negotiations with the US are underway, saying discussions are limited to Oman and related to the future of the Strait. That mixed message has left traders cautious, even as the immediate risk of escalation appears lower than it did earlier in the month.
Investors are now waiting for this week’s Federal Reserve meeting. The central bank is widely expected to leave interest rates unchanged, although some traders still see the possibility of another move later in the year. For now, the broader view is that any rate increase would likely be delayed until September, keeping silver supported if geopolitical risks continue to ease and inflation concerns remain contained.
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