Silver moved back toward the 59 US-dollar mark on Tuesday as traders weighed a jump in Middle East risk against a still-restrictive US interest-rate backdrop. The metal traded at around 58.66 US dollars per ounce, up about 1.2 percent from the previous day, while on COMEX it climbed 1.42 US dollars to 59.28 US dollars per ounce.

The latest bid came after a sharp deterioration in the security situation around the Strait of Hormuz. The UKMTO said an unknown projectile hit a cargo ship off the coast of Oman in the strategic waterway, stoking risk premiums across commodity markets. US President Donald Trump had already warned on Monday that talks with Iran were the “last chance” to reach an agreement on reopening the key passage, and also threatened continued maritime blocking of Iranian ports if no deal is reached.

That mix of diplomacy and disruption has helped keep silver supported at a time when investors are again looking at the metal as a hedge against geopolitical shocks. Lower energy prices and easing worries about Hormuz have also fed into the broader precious-metals bid by cooling inflation expectations, even if the day’s move was driven by the fresh escalation.

A second source of support came from South Korea. The Bank of Korea said it would buy physical gold again after a 13-year pause, sourcing domestic production that had been earmarked for export so as not to strain the local market. The central bank plans to work with LS MnM, the Korea Exchange and the Korea Securities Depository. Its gold reserves stand at 104.4 tonnes, low by global standards, and the move is meant to build holdings over the long term as geopolitical risks rise. That backdrop tends to bolster sentiment across precious metals, including silver.

At the same time, the Federal Reserve is keeping a lid on enthusiasm. The central bank left its policy rate unchanged at 3.50 to 3.75 percent, but the vote split was notably hawkish: three members backed an immediate rate increase. A tighter-for-longer stance typically weighs on non-yielding assets, and the market is pricing a 68 percent probability of another rate move in the coming month. That helps explain why silver has been unable to break decisively above 62 US dollars.

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The chart picture remains mixed. Silver is still about six percent below its 50-day average of 62.12 US dollars, according to Economies.com, and the RSI is 46.2, a neutral reading. Year to date, the metal is down more than 17 percent, and it remains more than 50 percent below January’s high of 121.78 US dollars. In another reading, January 2026 brought a peak of 121.62 US dollars, leaving the price roughly 52 percent beneath that record. Either way, the distance from the highs is still substantial.

On the physical demand side, the picture is less bleak than the price action suggests. Solar power has long been the main growth engine for silver, but the industry is accelerating its shift toward “desilvering” as producers switch from silver to copper plating to cut material costs. Estimates point to a 19 percent drop in solar demand in 2026, to about 151 million ounces.

That decline is being partly offset by new sources of industrial demand. The build-out of data centers for artificial intelligence is consuming more silver because of its conductivity, and electric vehicles remain a steady user of the metal as well, with each car requiring between 25 and 50 grams. The semiconductor industry is also cited as a support for the physical market.

Even so, the supply side continues to look tight. 2026 would mark the sixth straight year of a silver market deficit, leaving physical availability constrained regardless of fluctuations in the futures market. For now, traders appear stuck between a technical floor around 57 US dollars and the prospect of another move higher if the Hormuz situation worsens or if inflation and Fed expectations shift in silver’s favor.

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