Peace Pact Reverses Silver’s 40% Slide, Lifting the Metal Above $70 on Rate and Industry Hopes

A dramatic turnaround in the Middle East has pulled silver out of a five-week tailspin. The agreement between Washington and Teheran to end hostilities and reopen the Strait of Hormuz sent the white metal surging nearly 4% to around $70.70 an ounce, briefly touching $70.80. The move erased part of a more than 40% rout that had hammered the asset since mid-April.

The cease-fire, confirmed by President Donald Trump, removes the naval blockade that had choked shipping through the strategic waterway. Oil prices tumbled as energy supply fears dissipated, while the US dollar slid to a ten-day low. A weaker greenback makes dollar-denominated metals cheaper for overseas buyers, adding a tailwind to silver’s rebound. The formal memorandum is set to be signed in Switzerland on June 19.

Falling crude prices are reshaping inflation expectations, and with them the outlook for Fed policy. The CME FedWatch Tool shows the probability of a December rate hike dropping from 67% to 55%. Other market gauges suggest an even sharper retreat, with some readings placing the likelihood below 50%. Just weeks ago a further tightening had appeared all but certain after Goldman Sachs stripped out 2026 rate-cut forecasts entirely. The change in sentiment provides fresh oxygen for non-yielding assets like silver.

Should investors sell immediately? Or is it worth buying Silber Preis?

The Federal Reserve delivers its next rate decision on June 17 at 2:00 p.m. New York time. While a change is all but ruled out – the market assigns a 97% chance of no move – traders will scrutinise the dot plot and the tone of the press conference for clues about the autumn path. Analysts expect the Fed funds target to remain in a 3.50%–3.75% range. A dovish hold would reinforce the message that inflation pressures are easing, further supporting precious metals.

Beyond the geopolitical catalyst, silver’s fundamentals remain acutely tight. The Silver Institute projects a sixth consecutive annual supply deficit in 2026, with a shortfall of 46.3 million ounces. Because industry accounts for more than half of global silver demand, the reopening of the Strait of Hormuz delivers a double boost: lower energy costs and a rebust in global industrial activity. That dynamic, combined with a gold-silver ratio of roughly 64, leaves the metal historically cheap relative to gold.

Market participants are now eyeing the 20-day moving average at $71.70 as near-term resistance. The Japanese Nikkei’s 5% rally on the back of the accord has lifted hopes of stronger Asian industrial demand, while gold’s more modest 3% gain underscores silver’s outsized sensitivity to both macro and industrial drivers. Should the official signing proceed as scheduled, the metal could test that overhead barrier before the week is out.