Silver prices hit 2-month high, surges 6% to $85.50 amid geopolitical jitters

Investor sentiment turned cautious after US President Donald Trump rejected Iran’s latest peace proposal as “totally unacceptable”, raising fears of renewed conflict in West Asia. Fresh attacks over the weekend also threatened the fragile ceasefire reached in April, while the continued blockade of the Strait of Hormuz kept crude oil prices elevated and added to worries over global inflationary pressures.

The rally in precious metals came as markets reassessed expectations for US monetary policy. Hopes of two Federal Reserve rate cuts this year have weakened significantly, with analysts now divided between limited easing and the possibility of no rate cuts in 2026.

Traders are also awaiting key US consumer inflation data due on Tuesday, which could provide further direction on the Fed’s policy path. Separately, markets are closely watching Trump’s upcoming visit to China, where discussions with President Xi Jinping are expected to cover Iran, Taiwan, artificial intelligence and nuclear security issues.

Gold prices, on the other hand, edged lower on Monday after Trump swiftly rejected Iran’s response to a proposed peace framework, intensifying concerns over inflation and clouding the outlook for interest rate cuts.

Spot gold slipped 0.5% to $4,692.49 per ounce, while US gold futures declined 0.6% to $4,701.30 an ounce. The market reaction followed Iran’s response on Sunday to a recent US proposal aimed at reviving negotiations. Tehran’s proposal reportedly focused on ending the conflict across multiple fronts, particularly in Lebanon and included demands for compensation related to war damages.

However, within hours of the response being made public, Trump dismissed the proposal in a social media post, dampening hopes of a near-term diplomatic breakthrough.