Silver Price Forecast: XAG/USD remains below $59.00 on renewed Hormuz tensions

XAG/USD depreciates after two days of gains, trading around $58.80 per troy ounce during the Asian hours on Monday. The price of the white metal falls as fresh military clashes between the United States (US) and Iran in the Strait of Hormuz drove oil higher, sparking renewed fears of inflation. Investors remain highly sensitive to evolving headlines out of the Middle East as they assess the stability of the region and its broader impact on global risk sentiment.

However, Washington and Tehran have agreed to halt attacks against each other before peace talks resume in Doha this week. This diplomatic opening follows several days of retaliatory strikes triggered on Thursday when an Iranian projectile hit a cargo vessel, leading both the US and Iran to accuse one another of violating a previously established June 17 interim ceasefire. Official delegations from both countries are scheduled to meet in Qatar on Tuesday to negotiate an end to the conflict.

The non-yielding Silver also faces challenges due to lingering hawkish expectations from the Federal Reserve (Fed). According to the CME FedWatch Tool, traders are currently pricing in a 59.7% probability of a rate hike as soon as September 2026.

Traders are awaiting this week's key labor market reports, culminating in Thursday’s Nonfarm Payrolls (NFP) data, which are expected to provide critical clues regarding the Fed's interest rate trajectory. Forecasters anticipate June job growth to come in at 114,000, with the Unemployment Rate expected to remain flat at 4.3%.