Spot silver (XAG/USD) experienced a pullback during Tuesday's Asian trading session, with prices hovering around $76.40, partially erasing gains from the previous day. The market is reassessing the impact of escalating Middle East tensions on global energy prices, inflation outlook, and monetary policy, leading to significantly increased volatility in the precious metals sector.
Earlier, a "defensive strike" by the U.S. military on southern Iran reignited market concerns over a worsening Middle East situation. A spokesperson for U.S. Central Command stated that the targets included missile launch facilities. Despite U.S. military assurances of restraint during the ceasefire, markets remain worried about potential renewed threats to shipping security in the Strait of Hormuz, with reports of explosions near the port of Bandar Abbas and surrounding areas. As the strait handles approximately 20% of global seaborne crude oil shipments, concerns are rising that energy supply risks could intensify.
Consequently, international oil prices rebounded notably after a previous sharp decline. The rise in crude prices has revived concerns over global inflationary pressures. Against the backdrop of potentially rising energy costs, investors are reassessing the future monetary policy paths of global central banks. This environment creates significant pressure for silver. While silver possesses safe-haven attributes, it is also a classic non-yielding asset. When market expectations point to global central banks maintaining higher interest rates for longer, the opportunity cost of holding silver rises markedly, weakening buying momentum.
U.S. inflation data remains broadly sticky, and Middle East energy risks could further fuel imported inflation globally. Markets worry that the Federal Reserve and the European Central Bank may be compelled to maintain a hawkish policy stance, which exerts some downward pressure on precious metals, including gold and silver.
However, the current market sentiment has not turned entirely pessimistic. Negotiations between the U.S. and Iran regarding a ceasefire and the reopening of the Strait of Hormuz continue to progress. According to circulating framework proposals, the U.S. might lift some maritime blockade measures, while Iran would reopen the Strait of Hormuz to restore global energy shipping order.
U.S. President Donald Trump stated that the talks are "progressing well" but warned that the U.S. could resume military strikes if negotiations break down. Simultaneously, a Pakistani mediator indicated to Asian nations that the parties are relatively close to reaching an agreement. This series of developments has caused significant swings in market sentiment. On one hand, investors are concerned about energy supply risks; on the other, there is hope that a ceasefire agreement could alleviate global energy pressures. Consequently, the silver market has entered a phase of high-volatility consolidation.
From an industrial demand perspective, silver retains some long-term support. Global demand from the new energy sector, solar equipment, and the electronics industry continues to grow, with the market viewing the medium-to-long-term supply-demand structure for silver as tight. However, short-term macroeconomic factors and the U.S. dollar's trajectory remain the core variables determining silver's direction.
From a daily chart perspective, silver underwent a technical correction after forming a recent high around $78, with prices now retreating to the $76 region. On the daily timeframe, the 20-day moving average continues to trend upward, suggesting the medium-to-long-term uptrend remains intact, though short-term profit-taking pressure has increased. The MACD indicator shows its red momentum bars beginning to shorten, indicating waning bullish momentum. Key resistance levels above are situated around $77.20 and the $78 region; a subsequent breakout could see the market challenge historical highs again. Key support levels below are located near $75 and $73.80.
Overall, the silver market is currently influenced by a triad of factors: "geopolitical risk," "energy-inflation expectations," and "global central bank policy paths." Short-term market volatility is likely to remain elevated.