Silver holds above $75.50 as Iran deal uncertainty fuels safe-haven demand

Silver held above $75.50 an ounce as uncertainty over a US-Iran nuclear deal kept safe-haven demand elevated despite a sharp weekly selloff in crude oil.

Silver held above $75.50 an ounce on May 31 as uncertainty over a US-Iran nuclear deal sustained safe-haven demand, after swinging from a session low near $72 midweek.

COMEX silver futures swung more than 5% during the week, sliding to the lowest since April before recovering above $76 on reports of a potential 60-day ceasefire framework, exchange data show.

The recovery tracked a broader precious metals rebound after five consecutive daily declines in gold. Spot gold fell to $4,365 an ounce midweek before climbing back above $4,590 by Friday, while silver surged above $76 before settling above $75.50, according to LBMA data.

The next catalyst is whether the reported ceasefire framework — which includes Iran removing mines from the Strait of Hormuz and guaranteeing free commercial shipping — receives formal approval from President Donald Trump and sign-off in Tehran. Without confirmation, the risk premium embedded in precious metals is unlikely to fully unwind.

The uncertainty has created a sharp divergence across commodity markets. Brent crude posted its steepest weekly decline since early April, dropping roughly 11% to settle near $91 a barrel, as the prospect of de-escalation in the Strait of Hormuz triggered an unwinding of war risk premiums built up over three months of conflict. WTI fell more than 9%, ending May about 17% lower — its worst monthly performance since March 2020.

Precious metals followed a different path. While the initial ceasefire reports weighed on gold and silver midweek, renewed military exchanges and continued diplomatic uncertainty restored safe-haven flows by Friday. An adviser to Iran's Supreme Leader publicly accused Washington of overreach, indicating that Tehran's position remains unsettled, while the US military said it stood ready to resume operations in the Gulf if needed.

Divergence Across Metals

Base metals delivered a mixed performance. Copper eased slightly over the week but ended May nearly 5% higher, supported by steady manufacturing demand and tightening supply conditions. Production constraints in Chile, shortages affecting smelters, and falling LME inventories all provided a floor. Aluminium outperformed, rising to fresh four-year highs as ongoing regional supply disruptions and tighter balances continued to attract buyers.

The dollar held near 99 for most of the week, caught between a softer monthly US inflation print and cautious Federal Reserve commentary that kept rate cut expectations muted. US equities finished higher, with the Nasdaq gaining more than 2% on the prospect of lower energy costs.

The week ahead starting June 1 will be pivotal. Key questions include whether the ceasefire framework is formally approved and whether the specific terms on Strait of Hormuz access hold. On the macroeconomic front, final global PMI readings and the US jobs report will be market focal points. With so much unresolved on both fronts, precious metals are likely to remain sensitive to headlines and prone to sharp moves in either direction.

This article is for informational purposes only and does not constitute investment advice.