Silver Price Forecast: XAG/USD remains below $61.00 following attacks on Riyadh’s airport

Silver faces pressure from inflation concerns as oil could rebound following deadly attacks on Riyadh’s airport.
US President Donald Trump is considering joining Saudi Arabia to retaliate against Iran-backed Houthis.
CME FedWatch tool suggests the probability of a Fed 25-basis-point rate hike this month is 19.4%.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) loses ground after registering over 2.5% gains in the previous trading day, remaining around $60.70 per troy ounce during European hours on Monday. Non-yielding Silver struggles amid inflationary concerns as crude oil prices may regain ground following deadly attacks on Riyadh’s King Khalid International Airport.

The Riyadh attack has prompted United States (US) President Donald Trump to consider joining Saudi Arabia in retaliating against Iran-backed Houthis in Yemen. The Riyadh airport was targeted again on Sunday by Houthi militants, just a day after a previous strike killed 12 people and injured more than 300.

Moreover, a drone struck an oil tanker near the Sohar anchorage off Oman over the weekend, just outside the Strait of Hormuz, highlighting ongoing vulnerabilities despite signs of higher crude exports from the Persian Gulf.

University of Michigan's Consumer Sentiment Index declined to 46.3 in October, down from 48.1 in September and missing market forecasts of 47.6. According to the CME FedWatch tool, the probability of a rate hike of at least 25 basis points this month is 19.4%, down from 24.4% the previous week. In contrast, market participants are strongly pricing in an 86% chance of a rate increase at the Fed's December meeting.

HSBC links bond market shock to Iran-driven oil surge

Strategists at HSBC argue that “one of the major factors behind 2026’s bond market shock has been the surge in oil prices caused by the Iran conflict,” highlighting how the sharp rise in energy costs has fed directly into fixed income volatility and repricing.

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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