Spot silver (XAG/USD) continued its downward trend in Asian trading on Tuesday, falling approximately 1.35% to around $61. The silver market has recently been influenced by multiple factors, including energy risks, inflation expectations, and changes in global monetary policy, leading to a continuation of its previous correction.

Rising oil prices have become a significant factor putting short-term pressure on silver prices. Iran's recent firing of at least two missiles at commercial vessels transiting the Strait of Hormuz has reignited market concerns about energy transport security. The Strait of Hormuz is a vital global energy transport route, with approximately one-fifth of the world's energy supply passing through this area; therefore, any transport risks can quickly impact energy prices.

Rising energy prices typically increase market concerns about a resurgence of inflation, and the volatility in global energy markets over the past few months has demonstrated that high oil prices may force major central banks to maintain a tighter monetary policy stance. For silver, as a precious metal that does not generate interest income, a rising interest rate environment generally diminishes its investment appeal.

Previously, during periods of tension in the Middle East, silver underperformed gold, primarily due to rising energy prices fueling inflation expectations and raising market concerns that the Federal Reserve and other major central banks might extend their high-interest-rate policy cycles. Higher interest rates are generally detrimental to non-yielding assets like silver.

Currently, market focus is gradually shifting to the future policy path of the Federal Reserve. Investors are awaiting the release of the minutes from the Fed's June monetary policy meeting on Wednesday, hoping to find new clues about interest rate changes and policy stance. At the June policy meeting, the Fed decided to keep interest rates unchanged, maintaining the target range at 3.50%-3.75% . At the same time, the Fed signaled that, under the current policy environment, the central bank will avoid providing excessive forward guidance on the future path of interest rates to maintain policy flexibility.

If the Fed minutes release a dovish signal, market expectations for future interest rate cuts may strengthen, thereby reducing pressure on real yields and providing support for silver. Conversely, if Fed officials continue to emphasize inflation risks, silver may face further downward pressure. From a market sentiment perspective, silver has not yet experienced significant panic selling, but rather exhibits more of a technical correction after its recent rise. Investors are awaiting new macroeconomic signals to determine whether silver has completed its bottoming process or will continue to seek support at lower levels.

From a daily chart perspective, silver prices are currently maintaining a short-term weak trend, trading below the 20-day exponential moving average at $63.35 , indicating that short-term selling pressure remains. The RSI indicator is currently around 41, suggesting that the market is still in bearish territory but has not entered an extremely oversold state, implying that a technical rebound is still possible. However, due to repeated resistance from moving averages, the bulls currently lack significant upward momentum.

On the upside, the 20-day EMA around $63.35 is a key short-term resistance level . If the price can effectively break through and hold above this area, market sentiment may improve, propelling silver into a further recovery phase. On the downside, the key support level to watch is $60.00 . A break below this level could see silver further retest the seven-month low near $55.63.

From a 4-hour chart perspective, silver has recently formed a downward trend, with prices consistently suppressed by short-term moving averages, indicating a continued bearish short-term trend. Technical indicators suggest that sellers still hold a slight advantage, but as prices approach the key support area of $60, some bargain hunting may gradually emerge. If silver can hold $60 and regain the $62 area, the short-term rebound potential is expected to expand; however, if it breaks below $60, it may accelerate its decline and test the support near $55.63. The current market direction still depends on the Fed meeting minutes, the dollar's performance, and changes in energy market risks.

Editor's Summary : Silver has recently been affected by both escalating energy risks and changing interest rate expectations. The situation in the Strait of Hormuz has driven a rebound in oil prices, increasing inflation concerns and causing the market to refocus on the adverse effects of a high-interest-rate environment on silver. However, expectations of a future policy shift by the Federal Reserve still provide potential support for silver. In the short term, the key to silver's movement lies in whether the $60 support level can hold. If energy risks continue to escalate, it may drive safe-haven funds back into precious metals; however, if inflation concerns intensify and lead to higher yields, silver may continue to be under pressure. Going forward, the market will focus on the policy signals released in the Federal Reserve meeting minutes, as well as changes in the US dollar and real interest rates. The $60 to $63.35 range will be a crucial observation area for short-term trend reversals in silver ; the direction of the breakout may determine the next stage of the market trend.