During the Asian session on Monday, silver prices opened significantly higher, rebounding over 4% from the previous session's decline to reach $78.79 per ounce. The metal has since pared some gains, trading around $77.53 per ounce, up nearly 3%. Growing optimism over a potential U.S.-Iran agreement has eased market concerns about inflation and impending interest rate hikes, providing support for non-yielding assets like silver.
Reports indicate that the U.S. and Iran are nearing the signing of an agreement that includes a 60-day extension of the current ceasefire. Under the proposed terms, the Strait of Hormuz would reopen, with Iran agreeing to clear naval mines and allow free passage for vessels. In exchange, the U.S. would lift its blockade of Iranian ports. U.S. officials have described this arrangement as "performance for relief," meaning the faster Iran acts, the quicker the U.S. will remove the blockade. The draft agreement also reportedly includes an Iranian commitment not to pursue nuclear weapons and to negotiate a suspension of its uranium enrichment program and the transfer of its stockpiles of highly enriched uranium.
However, finalizing the deal faces multiple uncertainties. Iran has denied making any nuclear commitments, emphasizing that the Strait will continue to be "managed" by Iran and will not revert to a pre-conflict state of "free passage." The agreement has also drawn criticism from Republican hawks in the U.S., with Senator Lindsey Graham calling it "nothing short of a shot in the arm for Hezbollah." While former President Trump stated the deal is "largely agreed upon," he stressed there is "no rush to conclude it," and the blockade will remain effective until the agreement is "verified and signed." Markets are still awaiting confirmation on whether the U.S. military blockade will be lifted.
A significant sticking point remains the unfreezing of Iranian assets. Reports suggest the U.S. administration is still obstructing certain clauses in the conflict-ending agreement, particularly those related to releasing frozen Iranian assets. Iran insists that a portion of these assets must be unfrozen upon the announcement of a memorandum of understanding (MoU), with guarantees for Iran's full access to them. The mechanism for unfreezing the remaining assets during negotiations must also be clarified. Iran has warned it may reconsider advancing the talks if the U.S. continues to block the asset unfreezing. Iranian officials have stated that the MoU's contents are not yet finalized due to several factors, including U.S. obstruction on the asset issue, leaving open the possibility that no consensus may be reached.
This impasse has further tempered immediate market expectations. U.S. Secretary of State Marco Rubio noted that while the deal with Iran has gained regional support, a comprehensive nuclear agreement cannot be reached quickly or hastily. Rubio previously emphasized during a NATO foreign ministers' meeting in Sweden that while there has been "some progress," "we are not there yet," and the core issue—Iran's nuclear ambitions—remains unresolved, stating firmly that "Iran must not have a nuclear weapon." He outlined key U.S. demands: the Strait of Hormuz must be opened unconditionally, Iran cannot charge transit fees, and it must surrender its stockpiles of highly enriched uranium. Concurrently, Iran has stressed that the MoU does not address nuclear issues at all, and negotiations on that front will be postponed until after all hostilities cease and the U.S. fulfills its commitments. The fundamental divergence in negotiation frameworks and core issues between the two sides suggests significant uncertainty remains regarding the deal's ultimate realization.
Meanwhile, investors continue to assess the future path of Federal Reserve policy. Fed Governor Christopher Waller delivered his most hawkish signal to date in a speech on Friday. The long-time proponent of rate cuts explicitly stated he supports removing the "easing bias" language from the Fed's policy statement to indicate that future rate cuts are no more likely than hikes. Waller stated bluntly that "inflation is not moving in the right direction," and with inflation persistently above target and the labor market stabilizing, discussing near-term rate cuts is "simply not credible." He emphasized that if inflation does not begin to slow soon, he can no longer rule out the possibility of future rate hikes, adding he would "not hesitate to support raising rates" if inflation expectations begin to become unanchored.
Waller's hawkish pivot prompted rapid market repricing. Interest rate futures now indicate a roughly 55% probability of a 25-basis-point rate hike at the Fed's October meeting, with the probability of a hike in September also nearing 50%. Previously, traders widely expected the first hike no earlier than December. This shift coincides with the swearing-in of new Fed Chair Kevin Warsh last Friday, adding another layer of complexity to the global economic landscape. Market observers note that Warsh, upon taking office, is likely to garner support from several officials to push for a more "hawkish" shift in the policy statement at his first FOMC meeting on June 16-17. At the April meeting, three regional Fed bank presidents voted against retaining the "easing bias" language, marking the highest number of dissents on that issue since 1992. The narrative focus of Fed monetary policy is quietly shifting from "when will rate cuts come" to "are rate hikes necessary."
From a technical perspective on the daily chart, spot silver is currently trading around $77.84, consolidating after a recent pullback, with several technical indicators showing neutral to weak signals.
In the moving average system, the short-term MA5 (75.87) lies below the current price, providing short-term support. The MA20 (77.5724) is nearly level with the current price. The MA50 (75.89) below provides medium-term support. The MA100 (81.31) is significantly above the current price, indicating clear medium-term resistance, while the MA200 (65.94) below offers long-term support. The current price has moved above the MA5 and MA50 but is encountering resistance near the MA10 and MA20, suggesting silver is at a critical juncture for directional choice, with short-term rebound momentum present but facing clear overhead resistance.
In summary, silver is currently supported by positive developments in U.S.-Iran negotiations, with expectations of reduced geopolitical risk driving the price rebound. However, the unfreezing of Iranian assets remains a negotiation obstacle, and increasingly hawkish voices within the Fed could pose potential pressure on non-yielding assets. In the short term, the direction of silver prices will depend on substantive progress in U.S.-Iran talks, the navigation status of the Strait of Hormuz, and subsequent policy signals from the Federal Reserve.
As of 13:30 Beijing Time, spot silver was trading at $77.60 per ounce.
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