Spot silver (XAG/USD) was volatile on Tuesday (May 12th) and last traded at US$86.586/ounce, or about 0.5% above its previous close, after fluctuating within a daily range of US$83.057–US$87.208.

From the macro perspective, hotter US inflation data reinforced the “higher for longer” trend and curbed the precious metals rally. April CPI was recorded at 3.8% year-on-year (above expectations of 3.7%) and core CPI at 2.8% year-on-year, triggering a rise in Treasury yields, with the 10-year yield hovering around 4.46%.

Geopolitical tensions also added another layer of risk through the energy channel. Trump called the US-Iran ceasefire on “massive life support,” while the effective closure of the Strait of Hormuz kept the market focused on supply disruptions. Brent hovered around US$107.9–US$108.1/barrel, and WTI around US$102.5/barrel, reinforcing concerns about energy-driven inflation.

The combination of persistent inflation, higher

The combination of persistent inflation, higher yields, and a strengthening dollar limited silver's upside potential despite heightened uncertainty. Interest rate futures also showed the probability of a rate hike in 2026 rising to around 35%, indicating the market is increasingly cautious about an easing scenario.

The market's next focus will be on the direction of US-Iran negotiations and the status of the Strait of Hormuz, oil's movement as a driver of inflation, and the response of yields and the dollar to further inflation data and Fed officials' communications. (arl)