Silver surges toward record highs as US-Iran truce hopes boost markets

Silver extended gains on Friday, with the XAG/USD pair trading near $75.80 an ounce in Asian morning trade, as investors weighed reports of a tentative US-Iran ceasefire extension against caution that a final agreement has yet to be approved.

The white metal was supported by hopes that a longer truce could ease pressure on energy markets and reduce the risk of renewed shipping disruption through the Strait of Hormuz, a critical route for global oil flows.

Softer US inflation data also helped sentiment, lifting expectations that the Federal Reserve may have less reason to maintain a higher-for-longer policy stance if price pressures continue to moderate.

Ceasefire hopes support silver

Reports indicated that Washington and Tehran had tentatively agreed to extend their ceasefire for 60 days.

Iran was also said to be prepared to clear maritime mines within 30 days of the truce taking effect, potentially allowing freer movement of vessels through the Strait of Hormuz.

Any easing of shipping risks could help reduce energy costs, which have been a key driver of inflation concerns during the conflict.

Lower energy prices would, in turn, support expectations for softer inflation and a less restrictive Fed policy path.

That backdrop is generally favourable for silver, which does not pay interest and tends to benefit when yields and the dollar move lower.

Deal not final

Still, markets remained cautious after CNN reported that US President Donald Trump had not yet approved the terms of the agreement.

Vice President JD Vance said the two sides were close to a final deal but that the US was “not there yet.”

He also said Washington remained positioned to “substantially set back Tehran’s nuclear programme” if needed.

The comments kept geopolitical risk in focus, limiting the extent to which investors were willing to price in a durable de-escalation.

Softer inflation shifts Fed debate

Thursday’s US Personal Consumption Expenditures report showed headline prices rose 0.4% month on month, while core prices increased 0.2%.

On an annual basis, headline and core inflation stood at 3.8% and 3.3%.

Both measures remain above the Fed’s target, but the figures were cooler than feared after recent energy shocks.

For silver, the inflation outlook matters because expectations for lower rates can reduce the opportunity cost of holding non-yielding assets. A softer dollar also makes dollar-denominated metals more attractive to overseas buyers.

Industrial demand adds support

Silver also differs from gold because of its larger industrial role.

The metal is widely used in electronics, solar panels and other clean-energy technologies, making it sensitive to expectations for global growth.

Improved risk sentiment, lower energy costs and a less aggressive Fed could therefore support silver through both investment demand and industrial consumption.

Outlook

Near-term direction will depend on whether the US-Iran truce is confirmed and whether shipping through the Strait of Hormuz normalises.

Markets will also watch incoming inflation data and Fed commentary for clearer signals on the rate outlook.

With XAG/USD near $75.80, silver is balancing optimism over easing geopolitical risk with caution that the ceasefire agreement remains unfinished.