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[US-Iran Conflict Escalates, Inflation and Interest Rate Hike Expectations Exacerbate Pressure, Silver Falls Over 3%, Gold Retreats to $4050] 1. On Monday (July 13) during the Asian session, spot gold and silver opened lower and continued to decline, falling over 3% to $58.00 per ounce at one point, currently trading around $58.50 per ounce. Spot silver fell over 1.5% to $4052.97 per ounce at one point. The escalating US-Iran military conflict—with the US military striking more than 300 Iranian targets in the past three nights—has pushed up oil prices and exacerbated inflation and interest rate hike expectations, posing a double blow to the non-interest-bearing precious metal silver. 2. Geopolitically, the significant escalation of the US-Iran military standoff is the most crucial macroeconomic variable for the silver market. The US Central Command launched a new round of strikes on Sunday night, striking more than 300 Iranian targets in the past three nights. The Iranian Revolutionary Guard launched retaliatory strikes against US allies in the region and announced the "closure" of the Strait of Hormuz over the weekend, although the US military denied this. Iran stated that it will not resume further negotiations until Washington fully fulfills its commitments regarding shipping security and the normalization of Iranian oil exports. 3. The U.S. Central Command announced that it completed a new round of offensive strikes against Iran on July 12. This operation used precision-guided weapons, hitting dozens of targets at multiple locations within Iran. Targets included Iranian military air defense systems, coastal radar stations, missile and drone forces, as well as several small vessels. The U.S. military aims to weaken Iran's ability to disrupt commercial shipping in the Strait of Hormuz. The U.S. Central Command clearly stated that the Strait of Hormuz is a vital maritime passage for global trade and cannot be controlled by Iran. U.S. forces are deployed and prepared to ensure that commercial shipping continues to enjoy freedom of navigation. 4. Regarding monetary policy, the market is still pricing in at least one more rate hike by the Federal Reserve before the end of the year, an expectation further solidified against the backdrop of rising energy prices. The U.S. June CPI data to be released on Tuesday will be a key catalyst; stronger-than-expected data will further strengthen expectations of a rate hike. On the same day, Federal Reserve Chairman Warsh will make his first formal appearance before Congress, and the market is highly focused on his assessment of the impact of the U.S.-Iran conflict on the inflation outlook. 5. From a technical perspective, $58.00 has become a key short-term support level. If this level holds, silver may consolidate within the $58-$60 range; a decisive break below this level could lead to further declines. Given the current backdrop of both geopolitical risks and monetary policy uncertainty, silver market volatility is expected to remain high. The market is closely watching the Strait of Hormuz's navigation status, Middle East diplomatic developments, and how US data might revise expectations for Federal Reserve policy.