Silver prices edged higher in Asian trading on Thursday, recovering to approximately $69.15 per ounce, but the move appears more like a cautious rebound than a definitive breakout. The precious metal drew support from a decline in oil prices following a US-Iran interim agreement, which eased near-term inflation concerns and reduced pressure on interest rate expectations.
Oil Relief Provides Temporary Boost
The immediate catalyst for silver's recovery was a softer energy market. The US-Iran memorandum raised hopes that oil flows through the Strait of Hormuz could normalize, alleviating fears that elevated fuel costs would keep inflation sticky. This helped precious metals recover after a volatile session earlier in the week.
Analysts noted that the pullback in oil prices has tempered some upward pressure on interest rates, cooling expectations for further Federal Reserve tightening. Lower expected yields reduce the opportunity cost of holding non-yielding assets like silver and gold, supporting their appeal.
However, the relief is not absolute. The agreement extends a ceasefire by only 60 days, leaving major issues unresolved. This maintains a modest geopolitical premium in the market, but not enough to override the dominant rate narrative.
Technical Picture Remains Bearish
Despite the bounce, silver's chart retains a fragile posture. Prices remain below the 100-day simple moving average, while the relative strength index (RSI) holds near 45, below the neutral 50 level. This suggests momentum is improving but insufficient to confirm a bullish reversal.
The first resistance level is the psychological $70.00 mark. A break above that could open a path toward the Bollinger middle band near $71.45. Beyond that, the 100-day average around $77.62 remains a major technical hurdle. On the downside, the June 17 low near $66.81 is the initial support zone. If that level fails, attention could shift to the lower Bollinger band around $63.15.
As long as silver trades between $66.81 and $70.00, the market may remain trapped in a choppy recovery phase, lacking clear directional conviction.
Deficit Outlook Offers Long-Term Support
While short-term price action is dominated by Fed policy expectations, silver benefits from a stronger structural foundation than many other metals. The Silver Institute projects the market will remain in deficit for a sixth consecutive year, supported by firm investment demand even as high prices weigh on jewelry and silverware consumption.
This split explains the current tension: financial investors are willing to buy dips when inflation worries ease, but industrial users are more price-sensitive. For silver's rally to gain traction, it needs confirmation from both sides—a decisive break above $70.00 on the chart and a calmer interest rate backdrop from the Fed.
For related context, see our coverage of silver's earlier drop below $59 amid geopolitical tensions, and the gold rebound driven by softer CPI data.
This article is for informational purposes only and does not constitute financial advice.
