Rising expectations of a Federal Reserve rate hike dragged silver prices down more rapidly.
2026-06-08 14:46:10
On Monday during Asian trading hours, spot silver maintained a weak consolidation pattern, with prices hovering around $66.92 per ounce. Despite escalating geopolitical risks, market concerns about inflation and interest rate prospects outweighed the support from safe-haven demand for silver, leading to a second consecutive day of pullback in silver prices.
The core factors currently influencing the precious metals market are primarily the changing situation in the Middle East and adjustments in expectations regarding US monetary policy. Tensions in the Middle East escalated again over the weekend. Latest reports indicate that Israel launched strikes against multiple military targets within Iran in response to Iran's earlier missile launches targeting northern Israel.
Iran had previously launched multiple missile strikes against Israel and warned of a larger-scale response if Israel continued to escalate its military operations in Lebanon. While Israel stated that all incoming missiles were successfully intercepted without causing casualties, the escalation of the conflict has significantly heightened market concerns about the region spiraling out of control.
US President Trump recently publicly called on all parties to exercise restraint, hoping to push forward relevant negotiations and prevent the situation from deteriorating further. However, due to significant differences between the two sides on several core issues, the market remains cautious about a full de-escalation in the short term.
Escalating geopolitical risks are first reflected in the energy market. Market concerns that energy transport through the Strait of Hormuz may continue to be affected, leading to a tightening of global crude oil supply, have driven a significant rise in international crude oil prices and a rapid expansion of risk premiums in the energy market.
For the silver market, rising oil prices are not entirely positive news. On the one hand, rising energy prices could push up global inflation; on the other hand, renewed inflation could force major central banks to maintain high interest rates for a longer period. Since silver is a non-fixed-income asset, a high-interest-rate environment often diminishes its investment appeal. Meanwhile, the continued performance of the US job market reinforces market expectations of a hawkish Federal Reserve policy.
Data released by the U.S. Bureau of Labor Statistics showed that U.S. nonfarm payrolls increased by 172,000 in May, significantly higher than the market expectation of 85,000. Although slightly lower than the revised previous figure of 179,000, it still indicates that the labor market continues to expand robustly. Furthermore, the U.S. unemployment rate remained at 4.3% in May, consistent with market expectations, further reflecting the resilience of the overall U.S. economy. Following the release of the strong employment data, the market quickly adjusted its assessment of future monetary policy.
Investors believe that the US economy and job market remain strong, and rising energy prices could push inflation back up, thus significantly reducing the likelihood of the Federal Reserve shifting to an easing policy in the short term. As market expectations for interest rate hikes rise, US Treasury yields and the US dollar index are supported, putting pressure on the precious metals market.
Although silver possesses the dual attributes of both a precious metal and an industrial metal, the market is currently more focused on the impact of interest rates on investment demand. Therefore, silver prices have significantly underperformed some risk assets in the short term. Looking at fund flows, some investors have recently chosen to increase their allocation to US dollar assets to mitigate potential market volatility. A stronger US dollar typically reduces the attractiveness of dollar-denominated precious metals to overseas buyers, which is also a significant reason limiting silver's rebound.
From a technical perspective, the daily chart for spot silver shows a consolidation phase after hitting a recent high. Prices remain above major medium- and long-term moving averages, and the overall trend has not fundamentally changed, but short-term downward pressure has increased. The MACD indicator shows signs of a bearish crossover at high levels, with the red bars continuing to narrow, indicating weakening upward momentum. The RSI indicator has fallen from overbought territory to around 55, reflecting a market correction. Key support levels to watch are $66.50 and $65.00; a break below these levels could lead to further testing of the $63.80 area. Important resistance levels are located around $68.80 and $70.00.
From a 4-hour chart perspective, silver prices have recently formed a high-level consolidation and pullback structure. Short-term moving averages are gradually flattening and showing signs of turning downwards, indicating a weakening of bullish momentum. The MACD indicator is running near the zero line, and the market is entering a directional decision phase. If the US dollar continues to be supported by expectations of interest rate hikes, silver prices may further fall to test the $66 area; conversely, if geopolitical risks continue to escalate and stimulate safe-haven demand, silver prices still have a chance to retest the resistance area above $69.
Editor's Summary : The current silver market is facing a tug-of-war between safe-haven demand and interest rate pressures. Escalating tensions in the Middle East should have provided support for precious metals, but inflation concerns stemming from rising energy prices and expectations of interest rate hikes based on strong US employment data are weakening silver's appeal as a non-interest-bearing asset. In the short term, expectations regarding Federal Reserve policy will continue to dominate market movements. Investors should pay close attention to US inflation data, speeches by Federal Reserve officials, changes in the US dollar index, and developments in the Middle East. If high interest rate expectations continue to strengthen, silver may continue its correction; if safe-haven demand intensifies further, it could provide new upward momentum for silver prices.
The core factors currently influencing the precious metals market are primarily the changing situation in the Middle East and adjustments in expectations regarding US monetary policy. Tensions in the Middle East escalated again over the weekend. Latest reports indicate that Israel launched strikes against multiple military targets within Iran in response to Iran's earlier missile launches targeting northern Israel.
Iran had previously launched multiple missile strikes against Israel and warned of a larger-scale response if Israel continued to escalate its military operations in Lebanon. While Israel stated that all incoming missiles were successfully intercepted without causing casualties, the escalation of the conflict has significantly heightened market concerns about the region spiraling out of control.
US President Trump recently publicly called on all parties to exercise restraint, hoping to push forward relevant negotiations and prevent the situation from deteriorating further. However, due to significant differences between the two sides on several core issues, the market remains cautious about a full de-escalation in the short term.
Escalating geopolitical risks are first reflected in the energy market. Market concerns that energy transport through the Strait of Hormuz may continue to be affected, leading to a tightening of global crude oil supply, have driven a significant rise in international crude oil prices and a rapid expansion of risk premiums in the energy market.
For the silver market, rising oil prices are not entirely positive news. On the one hand, rising energy prices could push up global inflation; on the other hand, renewed inflation could force major central banks to maintain high interest rates for a longer period. Since silver is a non-fixed-income asset, a high-interest-rate environment often diminishes its investment appeal. Meanwhile, the continued performance of the US job market reinforces market expectations of a hawkish Federal Reserve policy.
Data released by the U.S. Bureau of Labor Statistics showed that U.S. nonfarm payrolls increased by 172,000 in May, significantly higher than the market expectation of 85,000. Although slightly lower than the revised previous figure of 179,000, it still indicates that the labor market continues to expand robustly. Furthermore, the U.S. unemployment rate remained at 4.3% in May, consistent with market expectations, further reflecting the resilience of the overall U.S. economy. Following the release of the strong employment data, the market quickly adjusted its assessment of future monetary policy.
Investors believe that the US economy and job market remain strong, and rising energy prices could push inflation back up, thus significantly reducing the likelihood of the Federal Reserve shifting to an easing policy in the short term. As market expectations for interest rate hikes rise, US Treasury yields and the US dollar index are supported, putting pressure on the precious metals market.
Although silver possesses the dual attributes of both a precious metal and an industrial metal, the market is currently more focused on the impact of interest rates on investment demand. Therefore, silver prices have significantly underperformed some risk assets in the short term. Looking at fund flows, some investors have recently chosen to increase their allocation to US dollar assets to mitigate potential market volatility. A stronger US dollar typically reduces the attractiveness of dollar-denominated precious metals to overseas buyers, which is also a significant reason limiting silver's rebound.
From a technical perspective, the daily chart for spot silver shows a consolidation phase after hitting a recent high. Prices remain above major medium- and long-term moving averages, and the overall trend has not fundamentally changed, but short-term downward pressure has increased. The MACD indicator shows signs of a bearish crossover at high levels, with the red bars continuing to narrow, indicating weakening upward momentum. The RSI indicator has fallen from overbought territory to around 55, reflecting a market correction. Key support levels to watch are $66.50 and $65.00; a break below these levels could lead to further testing of the $63.80 area. Important resistance levels are located around $68.80 and $70.00.
From a 4-hour chart perspective, silver prices have recently formed a high-level consolidation and pullback structure. Short-term moving averages are gradually flattening and showing signs of turning downwards, indicating a weakening of bullish momentum. The MACD indicator is running near the zero line, and the market is entering a directional decision phase. If the US dollar continues to be supported by expectations of interest rate hikes, silver prices may further fall to test the $66 area; conversely, if geopolitical risks continue to escalate and stimulate safe-haven demand, silver prices still have a chance to retest the resistance area above $69.
Editor's Summary : The current silver market is facing a tug-of-war between safe-haven demand and interest rate pressures. Escalating tensions in the Middle East should have provided support for precious metals, but inflation concerns stemming from rising energy prices and expectations of interest rate hikes based on strong US employment data are weakening silver's appeal as a non-interest-bearing asset. In the short term, expectations regarding Federal Reserve policy will continue to dominate market movements. Investors should pay close attention to US inflation data, speeches by Federal Reserve officials, changes in the US dollar index, and developments in the Middle East. If high interest rate expectations continue to strengthen, silver may continue its correction; if safe-haven demand intensifies further, it could provide new upward momentum for silver prices.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
