Silver Rebounds, Energy Inflation Begins to Ease
Silver prices (XAG/USD) strengthened in European trading on Monday (June 22nd), after weakening in the previous three sessions. Silver hovered around US$66 per troy ounce, supported by improving market sentiment following positive developments in peace talks between the United States and Iran in Switzerland. This increase indicates renewed buying interest in the precious metal, although pressure from US monetary policy continues to weigh on price movements.
From a fundamental perspective, mediators from Qatar and Pakistan stated that Washington and Tehran had agreed on a formal roadmap to a final agreement within the next 60 days. This development helped ease concerns about disruptions to global energy supplies, especially after market concerns over the risk of conflict in the Middle East and tensions around the Strait of Hormuz. The decline in oil prices following this news also helped mitigate inflation concerns, providing room for silver to recover.
Furthermore, Iranian Foreign Minister Abbas Araqchi stated that diplomatic progress had brought several important concessions for his country. These include relief from oil and petrochemical exports, the release of some of Iran's frozen financial assets, and the launch of a domestic reconstruction and development plan. If this agreement is implemented, inflationary pressures from the energy sector could potentially ease, which could indirectly support demand for precious metal assets.
However, silver's strengthening remains uncertain. US President Donald Trump previously threatened to launch a direct attack on Iran if proxy attacks against Israel continued. This threat has left the prospects for peace fragile and could further increase market volatility. On the other hand, non-yielding silver also faces pressure from the Fed's hawkish stance, after several US central bank officials opened the door to an interest rate hike this year.
Given these conditions, silver's short-term movement will remain heavily influenced by two main factors: the sustainability of the US-Iran peace process and the direction of Fed interest rate expectations. If Middle East tensions subside and oil prices continue to fall, silver has the potential to sustain its recovery. However, if the US dollar strengthens again due to expectations of high interest rates, silver's gains could be halted again at the nearest resistance area. (arl)
Source: Newsmaker.id
