Silver prices weakened during the European session on Tuesday (May 19), reversing the previous day's gains amid Middle East uncertainty and lingering inflation concerns. At around 10:38 a.m. London time, spot silver was at US$75.47/ounce, down 2.69%.

The weakening occurred after silver attempted to recover, but the market returned to the defensive due to the lack of convincing progress regarding US-Iran diplomacy. Investors still believe the risk of escalation remains open, despite several discussions about negotiations.

On the macro front, pressure on precious metals comes from interest rates and a tight bond market. US benchmark yields remain high, with the US 10-Year yield at around 4.617%, maintaining the opportunity cost of holding non-yielding assets like silver.

The dollar is also firm, adding

The dollar is also firm, adding to the pressure on USD-traded precious metals. The Dollar Index was around 99.217 at the same time.

Meanwhile, energy prices remain a backdrop, containing inflation risks. Despite correcting from their peaks, Brent remains around US$110.55 and WTI at US$103.56, levels that remain historically high and sensitive to Hormuz headlines.

Market participants are now awaiting the next catalysts from the US, particularly the release of the FOMC minutes and flash PMI, to gauge how strong the "higher interest rates for longer" narrative holds. Without a clear decline in yields or geopolitical certainty, silver's recovery is likely limited in the near term. (arl)*