Silver prices fell by more than 4% in the European market on Monday, retreating from a one-week high and on track for their first loss in three days. This decline is driven by profit-taking and correction activities, coupled with pressure from rising global oil prices.

This comes as tensions escalate between the United States and Iran in the Strait of Hormuz, with Iranian media reporting a missile attack on a U.S. warship, while a U.S. official has denied the reports.

Price Overview

* Silver Prices Today: Silver fell by 4.15% to ($72.22), from an opening level of ($75.35), recording a session high of ($75.99).

* At Friday's close, silver prices rose 2.15%, marking the second consecutive daily gain and reaching a one-week high of $76.98 per ounce, supported by a dip in global oil prices at the time.

* Last week, silver lost approximately 0.5%, its second consecutive weekly decline.

Global Oil Prices

Oil prices rose by approximately 4% in global markets on Monday, resuming their ascent near multi-week highs amid fears of escalating U.S.-Iran tensions in the Strait of Hormuz.

According to Iran's Fars News Agency, two missiles struck a U.S. warship near Jask Island after it allegedly ignored Iranian warnings. Conversely, Axios reported that a U.S. official denied any American vessel was targeted by a missile attack.

U.S. President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations. Meanwhile, Iranian state media reported that the U.S. conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran is seeking an end to the U.S. blockade and a delay in nuclear negotiations, while Washington maintains that a nuclear deal is the priority.

The rise in global oil prices is renewing fears of accelerating inflation, which could push global central banks to raise interest rates in the near term—a sharp reversal from pre-war expectations of rate cuts or prolonged pauses.

U.S. Interest Rates

* Minneapolis Fed President Neel Kashkari stated that the longer the war with Iran continues, the higher the risks of inflation and economic damage, limiting the central bank’s ability to provide clear interest rate guidance.

* Chicago Fed President Austan Goolsbee noted on Saturday that following "bad" recent price data, caution must be exercised regarding rate cuts until inflation trends downward.

* According to the CME FedWatch Tool: Market pricing for the probability of keeping U.S. interest rates unchanged in June stands at 95%, with a 5% probability of a 25-basis-point cut.

* Investors are closely monitoring upcoming U.S. economic data and comments from Federal Reserve officials to refine these expectations.

Gold prices declined in the European market on Monday, continuing their losses for the second consecutive day under pressure from rising global oil prices, which are fueling inflation concerns and expectations of higher interest rates.

This comes amid anticipation of updates regarding peace negotiations between the United States and Iran, especially as the market awaits Iran's stance following the U.S. response to an Iranian proposal delivered via Pakistani mediators.

Price Overview

* Gold Prices Today: Gold prices fell by 0.9% to ($4,573.85), from an opening level of ($4,614.10), recording a session high of ($4,629.43).

* At Friday's close, gold prices lost 0.2%, marking the fourth loss in five days due to rising global oil prices.

* Last week, gold prices lost more than 2%, marking the second consecutive weekly loss due to inflation fears and the potential for global interest rate hikes.

Global Oil Prices

Oil prices rose in global markets on Monday by more than 1%, resuming their ascent near multi-week highs amid fears of escalating tensions between the United States and Iran over the Strait of Hormuz.

U.S. President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations in the U.S.-Israeli war with Iran.

Official Iranian media reported that the United States conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran seeks an end to the U.S. blockade and a postponement of nuclear negotiations, while Washington insists on making a nuclear deal the priority.

The Federal Reserve and U.S. Interest Rates

* The Federal Reserve kept interest rates unchanged last week for the third consecutive meeting.

* The FOMC voted 8 to 4 to maintain the benchmark federal funds rate in the 3.50% to 3.75% range, the lowest level since September 2022.

* The vote saw the largest dissent within the Federal Reserve since 1992, as some members no longer see a need for the U.S. central bank to lean toward monetary easing.

* Fed Chair Jerome Powell admitted that the conflict in the Middle East has created "new inflationary pressures" that were not previously accounted for.

* Minneapolis Fed President Neel Kashkari stated that the longer the war with Iran continues, the greater the risks of high inflation and economic damage, limiting the central bank's ability to provide guidance on interest rate policy at this time.

* Chicago Fed President Austan Goolsbee said on Saturday, following "bad" recent price data, that caution must be exercised regarding interest rate cuts until inflation begins to decline.

* According to the CME FedWatch Tool: Market pricing for the probability of keeping U.S. interest rates unchanged in June stood at 95%, with a 5% probability of a 25-basis-point cut.

* To refine these probabilities, investors are closely monitoring upcoming U.S. economic data and comments from Federal Reserve officials.

Gold Performance Forecast

Tim Waterer, chief market analyst at KCM Trade, said: "Gold is still suffering from the residual effects of the Federal Reserve's hawkish statements last week, particularly the prominent dissenting votes against further monetary easing."

Waterer added: "We expect gold to trade in a range between $4,400 and $5,500 by the end of the year. Reaching the upper end of this range would require a sustained de-escalation of tensions in the Middle East and a cooling of inflationary pressures, while persistently high oil prices will keep the metal in the lower half of the range."

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged on Friday. The total stays at 1,035.77 metric tons, the lowest level since October 16, 2025.

The Euro rose in the European market on Monday against a basket of global currencies, resuming gains that briefly paused on Friday against the U.S. dollar. The currency is approaching a multi-week high, benefiting from a slowdown in the greenback as investors assess developments in peace talks between the United States and Iran.

ECB President Christine Lagarde stated last week that the option of raising interest rates was discussed extensively during the recent meeting, noting that the upcoming meeting in June will be the "appropriate time" to re-evaluate the path of monetary policy.

Price Overview

* Euro Exchange Rate Today: The Euro rose against the dollar by approximately 0.25% to ($1.1747), up from Friday's closing price of ($1.1719), recording a session low of ($1.1720).

* The Euro ended Friday's trading down 0.1% against the dollar due to correction and profit-taking, after having reached a near two-week high of $1.1785 earlier in the session.

The U.S. Dollar

The dollar index fell by more than 0.2% on Monday, resuming losses that paused on Friday. This decline reflects a retreat in the U.S. currency against a basket of major and minor currencies.

The decline comes as safe-haven demand for the dollar slows while markets evaluate recent intensive talks between the U.S. and Iran. Official Iranian media reported that the U.S. conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran seeks an end to the U.S. blockade and a postponement of nuclear negotiations, while Washington remains insistent on prioritizing a nuclear deal.

President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations affected by the U.S.-Israeli war with Iran.

European Interest Rates

* In line with expectations, the ECB kept its key interest rates unchanged last week at 2.15%—the lowest level since October 2022—marking the seventh consecutive meeting without a change.

* President Lagarde noted that the Governing Council reached a unanimous decision to hold, despite a lengthy discussion regarding the "option to hike," and confirmed that June will be the "appropriate time" to reassess monetary policy.

* Following the meeting, money market pricing for a 25-basis-point rate hike by the ECB in June rose from 35% to 55%.

* Investors are now awaiting further Eurozone economic data regarding inflation, unemployment, and wages to further refine these interest rate expectations.

JThe Japanese yen rose in the Asian market on Monday against a basket of major and minor currencies, resuming gains that had briefly paused in the previous session against the U.S. dollar. The currency moved closer to a two-month high amid growing speculation of a Bank of Japan intervention in the foreign exchange market, capitalizing on lower liquidity during Japan's Golden Week holidays.

As inflationary pressures on BoJ monetary policymakers recede, the likelihood of a Japanese interest rate hike in June has declined, as the market awaits more data on the developments of the world's fourth-largest economy.

Price Overview

*   Japanese Yen Exchange Rate Today: The dollar fell against the yen by about 0.7% to (156.95¥), from Friday's closing price of (157.02¥), after recording a session high of (157.25¥).

*   The yen ended Friday's trading down by approximately 0.3% against the dollar due to correction and profit-taking operations, after having hit a two-month high of 155.49 yen earlier in the session.

*   Last week, the yen achieved a gain of about 1.45% against the dollar, marking its fourth weekly rise in five weeks and its largest weekly gain since late February, driven by BoJ intervention in the exchange market.

Japanese Monetary Authorities

Officials in Tokyo have refrained from confirming whether they have actually intervened in the exchange market to support the local currency. However, sources told Reuters that Japanese monetary authorities have indeed conducted yen-buying operations for the first time in two years.

Japan's top currency diplomat, Atsushi Mimura, stated on Friday that speculation remains widespread, issuing an explicit warning that Tokyo is prepared to return to the markets just hours after intervening to support the struggling yen.

Responding to a question about the possibility of Tokyo's intervention in the currency market, Mimura told reporters: "I will not comment on what we will do in the future. But I assure you that the Golden Week holiday in Japan has only just begun."

Opinions and Analysis

*   Mahjabeen Zaman, head of FX research at ANZ Bank in Sydney, stated: "The primary focus will be on whether additional intervention will occur, especially with Japan closed for the Golden Week holiday, which leads to lower liquidity during this period."

*   Zaman added: "More importantly, is whether the United States will join Japan's efforts to support the yen. If yen weakness persists, it can be argued that the chances of bilateral intervention will increase."

Japanese Interest Rates

*   Data from last week showed that core inflation in Tokyo slowed, contrary to market expectations for April.

*   Following that data, the market pricing for the probability of the BoJ raising interest rates by a quarter-point in the June meeting fell from 75% to 65%.

*   To re-evaluate these probabilities, investors are awaiting further data on inflation, unemployment, and wage levels in Japan.

*   BoJ Governor Kazuo Ueda stated last week that there is no immediate need to raise interest rates.

*   The BoJ kept interest rates unchanged last week for the third consecutive meeting, warning of escalating inflationary pressures due to the repercussions of the war with Iran and high energy prices.

*   The vote to hold rates passed with 6 members in favor and 3 members calling for a 25-basis-point hike to the 1.0% range.