Silver prices (XAG/USD) faced selling pressure during the European session on Friday (May 22nd), trading near $76 per ounce, amid uncertainty over whether the US and Iran will reach a peace agreement.

According to a report by the Iranian Labor News Agency (ILNA), a final draft of the peace proposal has been reached, but Iran's tough stance on uranium stockpiles and plans for a permanent toll road in the Strait of Hormuz have dampened expectations for an agreement announcement.

Silver has underperformed expectations in recent months, as oil prices remain high due to the closure of the Strait of Hormuz. Rising energy prices have boosted inflationary pressures in the US, leading traders to expect a Federal Reserve (Fed) interest rate cut this year to diminish.

According to CME FedWatch

According to CME FedWatch, the probability of the Fed keeping its benchmark interest rate unchanged or making at least one hike is at 50.8% and 48.1%, respectively. More hawkish Fed expectations have reduced the appeal of non-yielding assets like silver, limiting the upward momentum of the white metal.

Variables to monitor: developments in US-Iran negotiations, dunia oil prices, and the Fed's next policy move. (Arl)