Silver prices weakened during Wednesday's Asian trading session, dropping nearly 1%, with the spot price falling below $58 per ounce. Market sentiment was impacted by renewed uncertainty in US-Iran relations, leading investors to question the sustainability of geopolitical de-escalation, thereby eroding short-term support for precious metals.
From a geopolitical perspective, negotiations between the US and Iran regarding the Strait of Hormuz remain highly uncertain. Market surveys indicate that, following preliminary contacts through Oman, the US side has not agreed to direct meetings with Iranian representatives, stating only a willingness to communicate with mediators. This stance has cooled market expectations for substantive progress in the talks.
Disputes over passage through the Strait of Hormuz remain a core focus, as this channel handles approximately 20% of global energy transport. Should any related tolls or restrictions be implemented, it could push up crude oil prices and indirectly reinforce global inflation expectations. In this context, markets are reassessing the Federal Reserve's policy path, further elevating the expectation that "high interest rates will be maintained for longer."
Regarding interest rate expectations, if energy prices rise again due to supply concerns, it could prompt the Fed to maintain a tightening stance, thereby suppressing the performance of non-yielding assets like silver. Silver is highly sensitive to changes in real interest rates and typically faces significant pressure in a high-rate environment.
Short-term market focus is shifting to US macroeconomic data. The market anticipates the ADP employment change for June to show an increase of about 113,000 jobs, slightly below the previous figure of 122,000, while the ISM Manufacturing PMI is expected to remain at 54.0. The subsequently released Non-Farm Payrolls data will become a key variable determining the direction for the US dollar and precious metals.
Overall, the tug-of-war between geopolitical risks and interest rate expectations for silver is intensifying, but in the short term, it remains dominated by the dollar and real interest rate expectations, with weak trend momentum.
From a daily chart perspective, silver has entered a phase of low-level consolidation after its previous surge, with prices oscillating repeatedly around $58, indicating a rebalancing of bullish and bearish forces. The current structure shows characteristics of "high-level consolidation + declining momentum," with overhead resistance concentrated in the $59.20–$60.00 region. If this range cannot be breached, the overall bias remains towards consolidation with a weak tilt; initial support below is located at $57.20, with a break potentially leading to a further retreat towards the $56 area.
On the 4-hour chart, the price has entered a consolidating downtrend after breaking below short-term moving averages, with limited rebound strength, indicating a slight short-term advantage for bears. Momentum indicators remain neutral to weak, and the market awaits direction from the ADP and NFP data. If the data reinforces expectations for a stronger dollar, silver could further test lower support; if the data falls short of expectations, it may trigger a technical rebound towards the $59 vicinity.
Current Market Assessment
The silver market is currently in a phase of contest between geopolitical uncertainty and interest rate expectations. Limited progress in US-Iran talks is causing market risk sentiment to fluctuate, but the potential upside risk to energy prices is reinforcing expectations that the Fed will maintain high interest rates, thereby pressuring silver. In the short term, the core market driver will shift to the performance of US employment data. If the trend of dollar strength continues, silver still faces downward pressure; conversely, a phase of technical recovery may occur, but the overall trend is likely to remain consolidating with a weak bias.