Silver Price Outlook: XAG/USD stays under pressure below $77.00 amid escalating US-Iran tensions.

Silver weakens as renewed US-Iran tensions fuel inflation concerns and reinforce expectations of higher-for-longer interest rates. Iran claimed it struck a US F-35 fighter jet and multiple drones after Washington confirmed “self-defense” strikes in southern Iran. Meanwhile, investors continue to evaluate the Federal Reserve’s policy outlook after May consumer confidence fell amid rising inflation fears linked to the Middle East conflict.

Silver prices (XAG/USD) stayed under pressure for a second straight session, hovering near $76.90 per troy ounce during Wednesday’s Asian trading hours. The precious metal remained subdued amid renewed geopolitical tensions and uncertainty surrounding the strategically important Strait of Hormuz, although investors continued to watch for possible progress in US-Iran peace negotiations.

Market sentiment was shaken by fresh military confrontations in the Middle East, heightening concerns over a potential energy-driven inflation surge. These fears reinforced expectations that major central banks may maintain restrictive monetary policies for a longer period.

The US military confirmed carrying out self-defense strikes in southern Iran, while Iran’s Revolutionary Guard stated it had targeted an American F-35 fighter jet along with several drones allegedly entering Iranian airspace.

Adding to tensions, Iran’s foreign ministry condemned the recent US airstrikes in Hormozgan province, calling them a “gross violation” of the fragile seven-week ceasefire. Iranian media also reported explosions across the region early Tuesday.

Investors are also evaluating the Federal Reserve’s policy outlook, a key driver for non-yielding assets such as silver. The US Consumer Confidence Index slipped to 93.1 in May from a revised 93.8 in April, as concerns over inflation tied to the Iran conflict weighed on sentiment. Although consumers remained pessimistic about current labor market conditions, many still expected improvement later in the year.

Attention is now turning to upcoming comments from Federal Reserve officials, including Vice Chair Philip Jefferson and Governor Lisa Cook, for further insight into the inflation and interest-rate outlook. Traders are also awaiting Thursday’s US Personal Consumption Expenditures (PCE) report, which could provide additional clues on the future path of Fed policy.