Silver falls for second consecutive session

Silver prices experienced a notable downturn on Thursday, falling below the $36.50 per ounce mark for the second consecutive session.

This decline comes as investors grapple with escalating tensions in the Middle East, particularly after reports emerged suggesting US officials are preparing for a potential strike on Iran. Such developments have significantly amplified concerns about broader regional instability, prompting a shift in market sentiment.

Adding to the cautious atmosphere, the US Federal Reserve opted to leave interest rates unchanged and maintained a decidedly prudent policy stance. The central bank explicitly warned that President Trump’s recently implemented tariffs could potentially stoke inflation and further complicate the already delicate economic outlook.

This dual concern—geopolitical instability and the potential for trade-induced inflation—is weighing on investor confidence in various asset classes, including precious metals.

Despite this recent pullback, silver had surged to its highest level since 2012 earlier in the week. This impressive rally was fueled by a confluence of supportive factors: robust safe-haven inflows as investors sought refuge from global uncertainties, consistently resilient industrial demand, and deepening structural supply deficits within the market.

The metal's expanding role in critical growth sectors has been a significant driver of its strength. Silver's applications in solar energy, electronics, and electrification now collectively account for more than half of global demand, underscoring its increasing structural importance in the modern economy.

This demand is further amplified by the ongoing global push towards green energy and technological advancement. On the supply side, the market remains notably tight, facing its fifth consecutive annual deficit, meaning that consumption continues to outpace new production. This persistent supply-demand imbalance, combined with its diverse and growing industrial uses, provides a strong underlying fundamental support for silver prices, even amidst short-term geopolitical and economic uncertainties.