Silver held below $60 an ounce on Wednesday after dropping more than 3% in the previous session, as the US military launched fresh air strikes on Iran following recent attacks on ships transiting the Strait of Hormuz.
The renewed escalation threatened the interim US-Iran peace deal and drove oil prices higher, stoking inflation fears and raising prospects for interest rate hikes.
The US also revoked a waiver allowing Iran to sell crude on global markets, while the latest hostilities discouraged shipowners and regional producers from using Hormuz, raising the risk of renewed disruptions to global energy supplies.
Meanwhile, investors awaited the minutes of the Federal Reserve’s June meeting for further clues on the policy outlook.
Silver had recently rebounded after softer-than-expected US jobs data prompted markets to scale back expectations for near-term Fed rate increases, though the renewed Middle East tensions kept the outlook uncertain.