Silver prices fell more than 2% on Thursday. The metal dropped below $59 per ounce as escalating Middle East tensions triggered a surge in crude oil prices. Recent attacks on oil tankers raised fears of a global inflationary shock.
Investors now expect the U.S. Federal Reserve to maintain higher interest rates for longer to manage price pressures. A firming U.S. dollar and higher rates increased the opportunity cost of holding non-yielding precious metals.
The price drop occurred despite the European Central Bank holding interest rates steady. Market focus shifted to the inflationary impact of rising oil and its influence on future Fed decisions.