Silver prices fell in European trading on Monday, extending losses for a second consecutive session under pressure from a stronger US dollar and rising global oil prices, as military tensions between the United States and Iran intensified once again.

The latest round of military attacks comes amid ongoing negotiations between Washington and Tehran aimed at ending the three-month conflict, with US President Donald Trump seeking stricter conditions related to Iran’s nuclear program.

Price Overview

• Silver prices today: Silver fell 1.7% to $74.00 per ounce, down from the opening level of $75.29, after reaching an intraday high of $76.30.

• At Friday’s settlement, silver lost 0.5%, marking its third decline in the last four sessions due to weaker demand amid rising US Treasury yields.

US dollar

The dollar index rose 0.15% on Monday as part of a recovery from a two-week low, reflecting renewed strength in the US currency against a basket of global currencies.

The advance comes amid heightened market caution and reduced risk appetite after the United States and Iran exchanged a new round of military strikes while continuing intensive negotiations aimed at ending the war and reopening the Strait of Hormuz, one of the world’s most important energy trade routes.

Global oil prices

Oil prices jumped more than 3% on Monday, rebounding from five-week lows as military tensions escalated in the Strait of Hormuz, while Israel expanded its offensive in Lebanon, reducing hopes for a ceasefire across the Middle East.

Latest developments in the Iranian war

• The United States announced strikes on Iranian military sites, and Tehran responded with an attack on an air base.

• The US military said it destroyed Iranian air defense systems, a ground control station, and two drones.

• Iran’s Revolutionary Guard announced that it had retaliated by launching an attack on a US air base.

• Reports indicated that Kuwaiti air defenses intercepted missiles and drone attacks.

• The United States and Iran remain without an agreement to end the war after Trump stated that he is not in a hurry to finalize a deal.

• The US president returned the proposed agreement draft with Iran to include “stricter” conditions related to the nuclear file, extending negotiations for several additional days.

US interest rates

• According to the CME FedWatch Tool, market pricing for a Federal Reserve rate hike in December increased from 47% to 53%.

• Markets continue to price a 99% probability that interest rates will remain unchanged at the June meeting, while the probability of a 25-basis-point rate hike stands at 1%.

• To reassess those expectations, investors are closely monitoring upcoming key US economic data releases, in addition to comments from Federal Reserve officials.

Oil prices climbed more than 3% on Monday after the United States and Iran exchanged military strikes, while Israel ordered its forces to push deeper into Lebanon as part of its confrontation with the Iran-backed Hezbollah group.

Brent crude futures rose by $2.93, or 3.2%, to $94.05 per barrel.

US West Texas Intermediate crude futures also gained $3.36, or 3.9%, to $90.72 per barrel.

Despite Monday’s gains, both benchmarks posted steep losses in May, with Brent falling around 19% and US crude declining approximately 17%.

Hopes for a US-Iran agreement fade

The rally came as renewed tensions in the Middle East reduced expectations of an imminent announcement regarding an extension of the ceasefire agreement between the United States and Iran.

Washington hosted peace talks between Israel and Lebanon on Friday, but subsequent military developments increased uncertainty surrounding the negotiations.

The United States said on Sunday that it had carried out “defensive strikes,” while Iran’s Revolutionary Guard announced on Monday that its Aerospace Force had targeted an air base used in the US attacks.

US President Donald Trump said on Friday that he would soon decide whether to approve the proposed extension of the ceasefire agreement originally announced in early April.

Lebanon and Hezbollah remain central to any agreement

The report noted that Israel will be a key party to any potential agreement, while Iran has repeatedly stressed that Hezbollah must be included in any future political or security arrangements.

A US official said Washington had proposed a plan for a “gradual de-escalation” across the region.

Growing concerns over the Strait of Hormuz

Tony Sycamore, market analyst at IG, said concerns are increasing over the presence of naval mines in the Strait of Hormuz, one of the world’s most important oil and gas shipping routes.

“Even if an agreement is reached, it will not result in a large and immediate increase in oil supplies,” Sycamore said.

An Axios reporter wrote on X on Friday that Iran had planted additional naval mines in the strait during the previous week.

Meanwhile, Iranian Foreign Ministry spokesman Esmaeil Baghaei said delays in the diplomatic process stem from a lack of trust, conflicting US positions, and continued Israeli attacks on Lebanon.

Weak Chinese economy fails to cap oil gains

Supply concerns overshadowed economic data released from China over the weekend, which showed slowing manufacturing activity and reinforced fears that the world's second-largest economy is losing momentum.

At the same time, a Reuters survey indicated that Saudi Arabia may lower its official selling prices for oil bound for Asia in July for the second consecutive month.

Goldman Sachs warns of demand risks

Goldman Sachs said weak oil demand in China and Europe represents a major risk to its oil price outlook for the fourth quarter.

The bank expects Brent crude to average around $90 per barrel, while forecasting US crude at approximately $83 per barrel.

However, Goldman Sachs noted that any additional supply disruptions from the Middle East could push prices above those forecasts.

The US dollar traded little changed on Monday after posting a modest weekly loss, as investors awaited developments in Middle East peace talks and this week’s US employment data, which could influence the future path of Federal Reserve policy.

The dollar index, which measures the US currency against a basket of six major currencies, declined last week amid expectations that the United States and Iran were moving closer to an agreement that could lead to the reopening of the Strait of Hormuz.

The closure of the key oil shipping route drove energy prices higher and worsened inflation expectations, prompting some traders to increase bets on a Federal Reserve interest rate hike later this year.

However, with no new signs of progress in the negotiations and renewed tensions between the United States and Iran over the weekend, currency markets have shifted into a wait-and-see mode.

“We are waiting to see progress in one direction or the other,” said Tommy von Brömsen, FX strategist at Handelsbanken.

He added that reopening the Strait of Hormuz and a decline in oil prices could weaken the dollar in the short term, while risk-sensitive currencies such as the Swedish krona would likely benefit.

The dollar initially gained support during the conflict due to safe-haven demand and the relatively limited impact of higher energy prices on the US economy. However, it has since surrendered part of those gains amid uncertainty surrounding the future of the conflict.

The dollar index was little changed at around 99.02 after declining 0.4% last week.

Meanwhile, the euro edged down to $1.1652, while the British pound rose 0.1% to $1.3460.

Focus shifts to the Federal Reserve

Markets are now betting that the Federal Reserve’s next move will be an interest rate hike, reversing expectations that had pointed to rate cuts before the outbreak of the Iran conflict.

The shift reflects higher energy prices and their potential impact on inflation, as well as the continued strength of the US labor market.

The US nonfarm payrolls report is due on June 5. Economists surveyed by Reuters expect the unemployment rate to remain at 4.3% and for the economy to add approximately 85,000 jobs.

In a related development, Jerome Powell, whose term as Federal Reserve Chair officially ended on May 15 but who remains a member of the Board of Governors, warned against the politicization of monetary policy.

In remarks delivered on Sunday, Powell said one reason he chose to remain on the Board was what he views as ongoing threats to the independence of the US central bank.

Several Federal Reserve officials are scheduled to speak this week, including Beth Hammack, Lorie Logan, and Mary Daly.

The Japanese yen under scrutiny

Investors are also awaiting a speech from Bank of Japan Governor Kazuo Ueda on Wednesday for clues on whether the central bank intends to proceed with an interest rate hike at its next meeting.

Although there is no full consensus within the Bank of Japan regarding the decision, sources familiar with the matter indicated that pausing the reduction of government bond purchases is gaining support among policymakers.

The Japanese yen slipped 0.1% to ¥159.45 per dollar, remaining close to the ¥160 level that previously prompted Japanese authorities to intervene in the foreign exchange market to support the currency.

“¥160 appears to be the red line for Japanese authorities,” von Brömsen said.

“I believe we will see another intervention if we approach that level again.”

The Australian dollar was little changed at $0.7179, while the New Zealand dollar fell 0.4% to $0.5969.

Gold prices fell by more than 1% in European trading on Monday, retreating from a two-week high and heading toward their first loss in three sessions, amid profit-taking and corrective selling pressure. The precious metal also came under pressure from a stronger US dollar and rising oil prices as a new wave of military strikes was exchanged between the United States and Iran.

The latest round of attacks comes as Washington and Tehran continue negotiations aimed at ending the three-month conflict, with US President Donald Trump seeking stricter conditions related to Iran’s nuclear program.

Higher oil prices have revived inflation concerns, increasing pressure on Federal Reserve policymakers and boosting expectations for a US interest rate hike later this year, pending additional economic data and comments from Fed officials.

Price Overview

• Gold prices today: Spot gold fell 1.1% to $4,490.64 per ounce, down from the opening level of $4,540.17, after reaching an intraday high of $4,546.05.

• At Friday’s settlement, gold gained 0.95%, marking its second consecutive daily advance and reaching a two-week high of $4,595.33 per ounce, supported by progress in peace negotiations between the United States and Iran.

• Gold lost approximately 1.8% during May, recording its third consecutive monthly decline due to weaker investment demand amid rising global government bond yields.

US dollar

The dollar index rose 0.15% on Monday as part of a recovery from a two-week low, reflecting renewed strength in the US currency against a basket of global currencies.

The advance comes amid heightened caution and reduced risk appetite after the United States and Iran exchanged a new round of military strikes while continuing intensive negotiations aimed at ending the war and reopening the Strait of Hormuz, one of the world’s most important energy trade routes.

Global oil prices

Oil prices jumped more than 3% on Monday, recovering from five-week lows as military tensions escalated in the Strait of Hormuz, while Israel expanded its offensive in Lebanon, reducing hopes for a ceasefire across the Middle East.

Latest developments in the Iranian war

• The United States announced strikes on Iranian military sites, and Tehran responded with an attack on an air base.

• The US military said it destroyed Iranian air defense systems, a ground control station, and two drones.

• Iran’s Revolutionary Guard announced that it had retaliated by launching an attack on a US air base.

• Reports indicated that Kuwaiti air defenses intercepted missiles and drone attacks.

• The United States and Iran remain without an agreement to end the war after Trump stated that he is not in a hurry to finalize a deal.

• The US president returned the proposed agreement draft with Iran to include “stricter” conditions related to the nuclear file, extending negotiations for several additional days.

• Donald Trump said on Friday that he would make a decision soon regarding the proposed agreement to extend the ceasefire with Iran.

• The mechanism for releasing frozen Iranian assets abroad remains one of the most complex points of disagreement between Washington and Tehran.

• Iranian Foreign Minister Abbas Araghchi confirmed that messages continue to be exchanged with Washington, noting that the success of the talks will ultimately be judged by their final outcome and whether the rights of the Iranian people are preserved.

US interest rates

• Federal Reserve Vice Chair for Supervision Michelle Bowman said on Friday that the consequences of the Middle East conflict could generate more persistent inflationary pressures, potentially requiring a reassessment of the future path of US monetary policy.

• According to the CME FedWatch Tool, market pricing for a Federal Reserve rate hike in December increased from 47% to 53%.

• Markets continue to price a 99% probability that interest rates will remain unchanged at the June meeting, while the probability of a 25-basis-point rate hike stands at 1%.

• To reassess those expectations, investors are closely monitoring upcoming US economic data releases and comments from Federal Reserve officials.

Gold outlook

Ricardo Evangelista, analyst at ActivTrades, said: “The optimism surrounding US-Iran negotiations to end the confrontation in the Strait of Hormuz faded over the weekend. As a result, oil prices rebounded, reviving inflation concerns and reinforcing the Federal Reserve’s hawkish outlook.”

Evangelista added: “Traders will be closely watching this week’s key economic data releases, as they could reshape expectations regarding the future path of Federal Reserve policy, influencing demand for the US dollar and, consequently, gold prices.”

SPDR Gold Trust

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by 3.42 metric tons on Friday, marking a second consecutive daily decrease. Total holdings fell to 1,029.14 metric tons, the lowest level since October 15, 2025.