As the US-Iran conflict escalates, silver prices fell by more than 2% amid geopolitical tensions and interest rate pressures.
2026-07-13 10:47:30
On Monday (July 13) during the Asian session, spot silver opened lower and continued to decline, currently trading around $58.50 per ounce, a drop of about 2.5%. The struggle between inflation expectations and interest rate hike expectations is the core contradiction currently facing silver.
The ongoing escalation of the US-Iran military conflict—with the US military striking more than 300 Iranian targets in the past three nights—is driving oil prices sharply higher, exacerbating market concerns about energy-driven inflation and rising interest rates.
For silver, which does not generate interest, rising inflation expectations and rising interest rate expectations constitute a double negative factor.
The significant escalation of the military standoff between the US and Iran is the most crucial macroeconomic variable for the silver market.
Bahrain sounded air raid sirens again early this morning (July 13) local time. According to Iranian media reports, drones and missiles launched from different regions within Iran in a large-scale retaliatory attack against US military targets in the Gulf region—targets identified following the latest US military movements within the past 48 hours.
U.S. Central Command launched a new round of strikes Sunday night aimed at crippling Iran's ability to attack civilian vessels. Over the past three nights, the U.S. military has struck more than 300 Iranian targets, including approximately 140 targets on Saturday alone.
Iran’s Revolutionary Guard launched retaliatory strikes against U.S. allies in the region and announced over the weekend that the Strait of Hormuz would be closed “until further notice,” although the U.S. military denied this.
This escalation of the conflict has largely reversed the market optimism that arose last week due to the interim peace agreement between the US and Iran—an agreement that had previously boosted expectations of increased energy supplies in the Middle East. More seriously, the geopolitical outlook has deteriorated significantly.
Iran has stated that it will not resume further negotiations until Washington fully fulfills its previous commitments regarding shipping safety and the normalization of Iranian oil exports.
For silver, escalating geopolitical conflicts exert pressure through two pathways: first, tensions in the Strait of Hormuz push up oil prices, exacerbating market concerns about energy-driven inflation; second, rising inflation expectations further solidify market expectations that the Federal Reserve will continue to raise interest rates this year, thereby putting pressure on non-interest-bearing assets through the real interest rate channel.
Another source of pressure on the silver market comes from monetary policy expectations. The market is currently pricing in at least one more rate hike by the Federal Reserve before the end of the year. This expectation has been solidified against the backdrop of escalating US-Iran conflict leading to higher oil prices – rising energy prices could spill over into broader inflation, forcing the Fed to maintain its tightening stance.
US June CPI data will be released on Tuesday. The market expects overall CPI to decline by 0.1% month-on-month, while core CPI will rise by 0.3% month-on-month. If the data is stronger than expected, it will further strengthen the urgency for the Federal Reserve to raise interest rates, putting additional downward pressure on silver. Conversely, if the inflation data is weak, it may provide silver with a breather.
On the same day, Federal Reserve Chairman Warsh will make his first formal appearance before Congress. The market will be closely watching his assessment of the impact of the US-Iran conflict on the inflation outlook, as well as any hints he may give regarding the future policy path. If Warsh releases hawkish signals, it could further pressure silver prices; if he prefers to remain on the sidelines, it could provide marginal support for silver.
Looking ahead, the short-term price movement of silver will depend heavily on the evolution of three major variables: whether the US-Iran conflict will escalate further or whether there will be a diplomatic breakthrough, the direction of the US CPI data's revision of inflation expectations on Tuesday, and the policy signals released by Warsh in his congressional testimony.
From a technical perspective, $58.00 has become a key short-term support level. If it holds above this level, silver may consolidate within the $58-$60 range; a break below this level could lead to further declines and a search for lower support levels. On the upside, the $60.00-$60.50 area remains a significant resistance zone in the near term.
Given the current environment of both geopolitical risks and monetary policy uncertainties, volatility in the silver market is expected to remain high. Investors should closely monitor the navigation situation in the Strait of Hormuz, Middle East diplomatic developments, and revisions in US economic data regarding Federal Reserve policy expectations.
(Spot silver daily chart, source: EasyForex)
At 10:46 AM Beijing time on July 13, spot silver was trading at $58.35 per ounce.
The ongoing escalation of the US-Iran military conflict—with the US military striking more than 300 Iranian targets in the past three nights—is driving oil prices sharply higher, exacerbating market concerns about energy-driven inflation and rising interest rates.
For silver, which does not generate interest, rising inflation expectations and rising interest rate expectations constitute a double negative factor.
Geopolitics: The US-Iran conflict spirals upward, with the Hormuz region becoming the focal point of the power struggle.
The significant escalation of the military standoff between the US and Iran is the most crucial macroeconomic variable for the silver market.
Bahrain sounded air raid sirens again early this morning (July 13) local time. According to Iranian media reports, drones and missiles launched from different regions within Iran in a large-scale retaliatory attack against US military targets in the Gulf region—targets identified following the latest US military movements within the past 48 hours.
U.S. Central Command launched a new round of strikes Sunday night aimed at crippling Iran's ability to attack civilian vessels. Over the past three nights, the U.S. military has struck more than 300 Iranian targets, including approximately 140 targets on Saturday alone.
Iran’s Revolutionary Guard launched retaliatory strikes against U.S. allies in the region and announced over the weekend that the Strait of Hormuz would be closed “until further notice,” although the U.S. military denied this.
This escalation of the conflict has largely reversed the market optimism that arose last week due to the interim peace agreement between the US and Iran—an agreement that had previously boosted expectations of increased energy supplies in the Middle East. More seriously, the geopolitical outlook has deteriorated significantly.
Iran has stated that it will not resume further negotiations until Washington fully fulfills its previous commitments regarding shipping safety and the normalization of Iranian oil exports.
For silver, escalating geopolitical conflicts exert pressure through two pathways: first, tensions in the Strait of Hormuz push up oil prices, exacerbating market concerns about energy-driven inflation; second, rising inflation expectations further solidify market expectations that the Federal Reserve will continue to raise interest rates this year, thereby putting pressure on non-interest-bearing assets through the real interest rate channel.
Monetary Policy: CPI Data and Warsh's Congressional Testimony as Key Catalysts
Another source of pressure on the silver market comes from monetary policy expectations. The market is currently pricing in at least one more rate hike by the Federal Reserve before the end of the year. This expectation has been solidified against the backdrop of escalating US-Iran conflict leading to higher oil prices – rising energy prices could spill over into broader inflation, forcing the Fed to maintain its tightening stance.
US June CPI data will be released on Tuesday. The market expects overall CPI to decline by 0.1% month-on-month, while core CPI will rise by 0.3% month-on-month. If the data is stronger than expected, it will further strengthen the urgency for the Federal Reserve to raise interest rates, putting additional downward pressure on silver. Conversely, if the inflation data is weak, it may provide silver with a breather.
On the same day, Federal Reserve Chairman Warsh will make his first formal appearance before Congress. The market will be closely watching his assessment of the impact of the US-Iran conflict on the inflation outlook, as well as any hints he may give regarding the future policy path. If Warsh releases hawkish signals, it could further pressure silver prices; if he prefers to remain on the sidelines, it could provide marginal support for silver.
Outlook: Silver faces a directional decision around $58.
Looking ahead, the short-term price movement of silver will depend heavily on the evolution of three major variables: whether the US-Iran conflict will escalate further or whether there will be a diplomatic breakthrough, the direction of the US CPI data's revision of inflation expectations on Tuesday, and the policy signals released by Warsh in his congressional testimony.
From a technical perspective, $58.00 has become a key short-term support level. If it holds above this level, silver may consolidate within the $58-$60 range; a break below this level could lead to further declines and a search for lower support levels. On the upside, the $60.00-$60.50 area remains a significant resistance zone in the near term.
Given the current environment of both geopolitical risks and monetary policy uncertainties, volatility in the silver market is expected to remain high. Investors should closely monitor the navigation situation in the Strait of Hormuz, Middle East diplomatic developments, and revisions in US economic data regarding Federal Reserve policy expectations.
(Spot silver daily chart, source: EasyForex)
At 10:46 AM Beijing time on July 13, spot silver was trading at $58.35 per ounce.
- Risk Warning and Disclaimer
- 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.
