Silver Futures Fall to Lowest This Year as Oil Prices Fuel Inflation Risks

By Anthony Harrup

Silver futures fell for a second straight session Thursday, closing at their lowest level in almost a year as rising oil prices keep alive concerns about inflation and prospects for higher interest rates.

Front-month silver for October delivery settled down 4.6% in New York at $54.764 a troy ounce, its lowest close since Nov. 26, 2025 and 52% below the record high of $115.08 reached in January.

"We believe the latest weakness reflects mounting pressure from rising U.S. Treasury yields, a stronger dollar, and renewed inflation concerns as Brent crude climbs above $110 per barrel," Zaye Capital Markets' chief investment officer, Naeem Aslam, said in a note.

Gold has also been under pressure as higher yields and a strong U.S. dollar reduce the attraction of holding nonyielding assets like precious metals. Gold's losses have been tempered by central-bank buying and strong demand for gold exchange-traded funds.

"The market is finding a balance between demand for gold accumulation and pressure from high interest rates," XS.com market analyst Linh Tran said in a note. "Selling pressure has eased somewhat, but current buying interest remains insufficient to establish a new direction."

Front-month gold for October delivery fell 2.1% Thursday to $4,042.80 a troy ounce, its lowest close since Aug. 3.

Silver faces additional pressure because its use in industrial applications exposes prices to weaker manufacturing activity, Aslam said. Zaye expects silver's price direction will depend on whether improving industrial demand and persistent physical supply constraints can overcome pressure from restrictive U.S. monetary policy, he added.

Inflation is double-edged for gold, Forex.com market analyst Fawad Razaqzada said in a note.

"Persistent price pressures should, in theory, strengthen demand for the metal as a store of value," he said. "But if inflation proves sticky enough to keep central banks hawkish, the resulting rise in real and nominal yields makes gold less attractive at the margin."

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

October 22, 2026 14:31 ET (18:31 GMT)