CoinEx reports—During Asian trading on Tuesday, spot silver prices fell as much as 2.8% to $60.28 per ounce. Although Iran's missile strike on commercial vessels in the Strait of Hormuz pushed oil prices higher, silver came under pressure due to the传导 chain of "energy rise → higher inflation expectations → intensified concerns over rate hikes"—an unusual dynamic that has played out multiple times during Middle East conflicts.
According to Huitong Finance APP — during the Asian session on Tuesday, July 7, spot silver prices fell as much as 2.8% to $60.28per ounce, but have since recovered to around $61.15 per ounce, narrowing the loss to 1.4%.
Reports that Iran fired at least two missiles at commercial vessels transiting the Strait of Hormuz provided buying support for oil prices, while silver came under pressure due to the transmission chain of "energy prices → inflation expectations → concerns over rate hikes"—a pattern that has played out multiple times during Middle East conflicts.
Market focus shifts to the upcoming June FOMC meeting minutes on Wednesday, as investors seek new clues on the monetary policy outlook from the Federal Reserve.
The weakness in silver prices on Tuesday appears counterintuitive at first glance: escalations in the Strait of Hormuz are typically seen as risk-off events that should support precious metals. However, silver's decline precisely reflects the market's replication of the "abnormal trading logic" observed during Middle East conflicts.
Iran fired at least two missiles at commercial vessels transiting the Strait of Hormuz, sparking concerns over disruption to nearly one-fifth of global energy supplies and providing buying support for oil prices. However, silver did not benefit from safe-haven demand; instead, it came under pressure due to the following transmission chain: rising energy prices → elevated inflation expectations → heightened concerns over global central bank rate hikes → pressure on zero-yield assets.
Over the past several months during the U.S.-Iran tensions, markets have repeatedly witnessed this dynamic—silver, rather than acting as a safe haven in the face of energy shocks, has faced even greater pressure due to hawkish repricing of interest rate expectations. The more tense the situation in the Middle East and the higher oil prices rise, the stronger the market’s concerns about central bank rate hikes, and the higher the carrying cost of zero-yield precious metals becomes.
Tensions in the Strait of Hormuz have created dual pressure on silver:
The first pressure stems from the resurgence of inflation expectations. Risks to energy supply disruptions have pushed up oil prices, and oil is a key input for overall inflation. Given that the Fed still views inflation above 2% as a core concern, any rise in energy prices could be interpreted as a signal that the case for rate hikes remains valid.
The second source of pressure comes from expectations of changes in real interest rates. Silver does not generate interest income, so its holding cost is directly affected by real interest rates. When the market anticipates that central banks will raise interest rates to combat energy-driven inflation, upward expectations for real interest rates exert downward pressure on silver’s valuation.
This is precisely the institutional reason why silver "underperformed" during wartime—the interplay of its industrial属性 (sensitive to economic growth) and financial属性 (sensitive to interest rates) created a dual drag under energy shock scenarios, preventing it from benefiting purely from safe-haven demand like gold, or from physical premiums due to supply disruptions like other industrial metals.
Market focus has shifted to the upcoming FOMC minutes from the June policy meeting on Wednesday. At the June meeting, the Federal Reserve decided to keep the interest rate range unchanged at 3.50%-3.75% and signaled that it would avoid providing forward guidance on the policy rate at this juncture.
Investors will look for the following key information in the meeting minutes:
The committee's specific discussion on how energy price volatility affects the inflation trajectory
The logic behind "pausing forward guidance"—is it due to uncertainty, or does it hint that a policy shift is already being prepared?
Assessment of tolerance for a weakening labor market (only 57,000 jobs added in June non-farm)
If the minutes show that policymakers are more hesitant about rate hikes, silver may gain some breathing room; if the minutes reiterate a firm stance that "the 2% target is non-negotiable," combined with elevated energy prices due to tensions in the Strait of Hormuz, silver could face further downward pressure.
The technical structure of silver shows a clear bearish pattern:
Upper resistance: The 20-day moving average at $62.97 per ounce is the most immediate technical barrier for silver prices. Silver remaining below this average confirms a short-term bearish bias. Only a sustained breakout above this level can alleviate current downward pressure and create room for a more constructive recovery.
Support below: $60.00 is the most critical psychological support level currently. If this level is breached, silver prices could decline further toward the July low of $55.59. The RSI is hovering around 43, indicating that selling pressure remains present but has not yet reached extreme levels—suggesting that further downside movement in the short term cannot be ruled out.
In terms of price action, the rebound continues to face resistance near the short-term moving averages, indicating that bears still hold the upper hand. Under the current technical structure, forming a bottom requires time and repeated tests to validate the strength of the support.
(Spot silver daily chart, source: E-HuiTong)
Silver is at a crossroads in its battle between bulls and bears; the following three factors will determine its short-term direction:
First, the evolution of the Hormuz situation. If tensions escalate further and oil prices continue to rise, silver will face intensified inflation-to-rate-hikes expectations; however, if the situation unexpectedly de-escalates, the retreat of the energy premium could instead provide room for a silver rebound—since concerns over rate hikes would also ease.
Second, the FOMC minutes' implications for the interest rate path. Any discussion of a "higher bar for rate hikes" or "greater confidence in inflation declining" could trigger short covering in silver.
Third, the key breakthrough directions in the technical structure. If the silver price breaks below $60.00 effectively, it will open room for a pullback toward $55.59; if it forms effective support near $60.00 and breaks above the 20-day moving average, the short-term bottom may be confirmed.
At 14:52 Beijing time on July 7, spot silver was trading at $61.16 per ounce.
Reports that Iran fired at least two missiles at commercial vessels transiting the Strait of Hormuz provided buying support for oil prices, while silver came under pressure due to the transmission chain of "energy prices → inflation expectations → concerns over rate hikes"—a pattern that has played out multiple times during Middle East conflicts.
Market focus shifts to the upcoming June FOMC meeting minutes on Wednesday, as investors seek new clues on the monetary policy outlook from the Federal Reserve.
Why does silver prices fall when oil prices rise? — An anomalous correlation during wartime
The weakness in silver prices on Tuesday appears counterintuitive at first glance: escalations in the Strait of Hormuz are typically seen as risk-off events that should support precious metals. However, silver's decline precisely reflects the market's replication of the "abnormal trading logic" observed during Middle East conflicts.
Iran fired at least two missiles at commercial vessels transiting the Strait of Hormuz, sparking concerns over disruption to nearly one-fifth of global energy supplies and providing buying support for oil prices. However, silver did not benefit from safe-haven demand; instead, it came under pressure due to the following transmission chain: rising energy prices → elevated inflation expectations → heightened concerns over global central bank rate hikes → pressure on zero-yield assets.
Over the past several months during the U.S.-Iran tensions, markets have repeatedly witnessed this dynamic—silver, rather than acting as a safe haven in the face of energy shocks, has faced even greater pressure due to hawkish repricing of interest rate expectations. The more tense the situation in the Middle East and the higher oil prices rise, the stronger the market’s concerns about central bank rate hikes, and the higher the carrying cost of zero-yield precious metals becomes.
Hormuz conflict: Oil price "bullish" is a "bearish" for silver
Tensions in the Strait of Hormuz have created dual pressure on silver:
The first pressure stems from the resurgence of inflation expectations. Risks to energy supply disruptions have pushed up oil prices, and oil is a key input for overall inflation. Given that the Fed still views inflation above 2% as a core concern, any rise in energy prices could be interpreted as a signal that the case for rate hikes remains valid.
The second source of pressure comes from expectations of changes in real interest rates. Silver does not generate interest income, so its holding cost is directly affected by real interest rates. When the market anticipates that central banks will raise interest rates to combat energy-driven inflation, upward expectations for real interest rates exert downward pressure on silver’s valuation.
This is precisely the institutional reason why silver "underperformed" during wartime—the interplay of its industrial属性 (sensitive to economic growth) and financial属性 (sensitive to interest rates) created a dual drag under energy shock scenarios, preventing it from benefiting purely from safe-haven demand like gold, or from physical premiums due to supply disruptions like other industrial metals.
The FOMC minutes are the next key catalyst.
Market focus has shifted to the upcoming FOMC minutes from the June policy meeting on Wednesday. At the June meeting, the Federal Reserve decided to keep the interest rate range unchanged at 3.50%-3.75% and signaled that it would avoid providing forward guidance on the policy rate at this juncture.
Investors will look for the following key information in the meeting minutes:
The committee's specific discussion on how energy price volatility affects the inflation trajectory
The logic behind "pausing forward guidance"—is it due to uncertainty, or does it hint that a policy shift is already being prepared?
Assessment of tolerance for a weakening labor market (only 57,000 jobs added in June non-farm)
If the minutes show that policymakers are more hesitant about rate hikes, silver may gain some breathing room; if the minutes reiterate a firm stance that "the 2% target is non-negotiable," combined with elevated energy prices due to tensions in the Strait of Hormuz, silver could face further downward pressure.
Technical analysis: Key battle around $61
The technical structure of silver shows a clear bearish pattern:
Upper resistance: The 20-day moving average at $62.97 per ounce is the most immediate technical barrier for silver prices. Silver remaining below this average confirms a short-term bearish bias. Only a sustained breakout above this level can alleviate current downward pressure and create room for a more constructive recovery.
Support below: $60.00 is the most critical psychological support level currently. If this level is breached, silver prices could decline further toward the July low of $55.59. The RSI is hovering around 43, indicating that selling pressure remains present but has not yet reached extreme levels—suggesting that further downside movement in the short term cannot be ruled out.
In terms of price action, the rebound continues to face resistance near the short-term moving averages, indicating that bears still hold the upper hand. Under the current technical structure, forming a bottom requires time and repeated tests to validate the strength of the support.
(Spot silver daily chart, source: E-HuiTong)
Outlook: Three key variables will determine the direction of silver
Silver is at a crossroads in its battle between bulls and bears; the following three factors will determine its short-term direction:
First, the evolution of the Hormuz situation. If tensions escalate further and oil prices continue to rise, silver will face intensified inflation-to-rate-hikes expectations; however, if the situation unexpectedly de-escalates, the retreat of the energy premium could instead provide room for a silver rebound—since concerns over rate hikes would also ease.
Second, the FOMC minutes' implications for the interest rate path. Any discussion of a "higher bar for rate hikes" or "greater confidence in inflation declining" could trigger short covering in silver.
Third, the key breakthrough directions in the technical structure. If the silver price breaks below $60.00 effectively, it will open room for a pullback toward $55.59; if it forms effective support near $60.00 and breaks above the 20-day moving average, the short-term bottom may be confirmed.
At 14:52 Beijing time on July 7, spot silver was trading at $61.16 per ounce.