Silver prices extended their decline on Wednesday, falling toward $64 per ounce and touching their lowest levels since December 2025 as investors assessed fresh inflation data and escalating geopolitical tensions in the Middle East.
The metal remained under pressure after U.S. inflation figures largely met market expectations, reducing the likelihood of near-term monetary easing. At the same time, renewed military exchanges between the United States and Iran added another layer of uncertainty to global markets.
Despite silver’s traditional role as a safe-haven asset, traders focused more heavily on interest rate expectations and inflation trends.
Inflation Reaches Highest Level Since 2023
Fresh data showed that headline inflation climbed to 4.2% in May, marking its highest reading since April 2023.
The increase was driven primarily by rising energy costs linked to the ongoing conflict involving Iran. According to the Bureau of Labor Statistics, energy prices increased 3.9% during May after rising 3.8% in April.
Energy costs accounted for more than 60% of the overall monthly increase in consumer prices.
Meanwhile, core inflation, which excludes food and energy, rose to 2.9%, reaching its highest level in seven months.
The data reinforced concerns that inflation remains stubbornly above policymakers’ comfort levels despite signs of slowing wage growth.
Americans Continue To Feel The Pressure
Inflation has now exceeded wage growth for a second consecutive month. Average hourly earnings increased at a 3.4% annual pace in the latest jobs report, trailing the 4.2% inflation rate. As a result, consumers continue losing purchasing power.
The Bureau of Labor Statistics reported that real average weekly earnings declined 0.2% during May and fell 0.7% from a year earlier.
That marked the largest annual decline in real earnings since February 2023. Economists noted that households continue facing elevated costs across essential spending categories, including fuel, electricity, food, and healthcare.
Those pressures remain a major concern for both consumers and policymakers.
Federal Reserve Expectations Weigh On Silver
The inflation report prompted traders to slightly reduce expectations for policy easing later this year. Markets continue pricing in a quarter-point rate increase by December following stronger-than-expected employment data released last week.
Why does that matter for silver?
Like gold, silver does not generate income. Higher interest rates often increase the appeal of yield-bearing assets such as bonds, reducing demand for precious metals. As a result, expectations that rates could remain elevated for longer contributed to the metal’s decline.
Iran Tensions Intensify Again
Geopolitical risks also remained firmly in focus. The United States and Iran exchanged fresh strikes as negotiations aimed at ending months of conflict struggled to produce a breakthrough.
President Donald Trump intensified pressure on Tehran, stating that Iran would “have to pay the price” for delaying an agreement.
In a social media post, Trump accused Iran of prolonging negotiations and warned of consequences if a deal remains out of reach.
Later, he suggested that new strikes targeting Iranian infrastructure could be ordered if Tehran refuses to sign an agreement.
The remarks came as reports indicated that Qatari negotiators traveled to Tehran in an effort to keep diplomatic discussions alive.
Silver Price Forecast
Silver now finds itself caught between conflicting market forces. Persistent inflation and geopolitical uncertainty typically support demand for precious metals. However, higher interest rate expectations and a stronger outlook for U.S. monetary policy continue to create headwinds.
If inflation remains elevated and the Federal Reserve maintains a restrictive stance, silver could face further downside pressure in the near term.
However, any major escalation in the Middle East or a sharp deterioration in global economic conditions could quickly revive safe-haven demand.
As of now, silver’s slide toward $64.5 per ounce reflects a market focused on inflation, interest rates, and growing uncertainty surrounding the future of U.S.-Iran negotiations.
