20/07/26

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Silver extended its advance for a second straight session on Monday, trading near $57 per troy ounce during Asian hours. Even so, the metal’s upside may remain limited in the near term as renewed geopolitical stress in the Middle East lifts oil prices and adds to concerns that inflation could stay elevated for longer.

Tensions between the United States and Iran intensified further as Washington carried out another round of strikes on Iranian targets. Iranian officials said the ceasefire between the two sides had effectively collapsed, raising the risk of wider disruption to key energy routes that pass through the region’s narrow waterways.

The conflict has broadened quickly. Air raid sirens were reported in Bahrain after Iran launched ballistic missiles and one-way attack drones toward sites in Bahrain, Jordan, Kuwait and Iraq. The US military also reported a third service member death within two days amid the continuing exchanges.

The violence has increasingly touched critical infrastructure as well as military positions. Bridges, utilities and port facilities have been hit, while Kuwait Petroleum Corp. confirmed that one of its oil facilities was struck over the weekend. The prospect of further disruption to energy supply has helped keep crude prices elevated, a factor that can weigh on non-yielding assets such as silver if it strengthens inflation expectations.

At the same time, traders are increasingly focused on the Federal Reserve. The central bank is widely expected to leave interest rates unchanged at its next meeting, but pricing in the futures market now gives a meaningful chance of a rate increase in September. That shift reflects growing concern that inflation pressures may prove more persistent than previously assumed.

Recent commentary from Fed officials has reinforced that view. Cleveland Fed President Beth Hammack delivered a more hawkish message than usual, stressing that inflation remains broad-based and difficult to contain. The remarks pointed to pressure from energy, supply chains, insurance costs and even data-center investment, suggesting that price pressures are not confined to a single sector.

Broader Fed communication has also leaned in a hawkish direction. That combination has supported the US dollar and reduced enthusiasm for lower-yielding metals, even as silver continues to find some support from safe-haven demand and geopolitical uncertainty.