Silver traded in a narrow range this week, closing at $75.55, down 0.5% from its opening price of $75.96, as the market balanced a hawkish Federal Reserve stance with ongoing geopolitical developments in the Middle East [1]. Early in the week, optimism around US-Iran diplomatic talks led to lower oil expectations, which in turn reduced inflation pressure and lessened the downward pressure on silver prices [1].
The release of the Federal Reserve's April 28-29 meeting minutes on Wednesday revealed that a majority of officials were open to hiking rates if inflation remained elevated, with four dissents marking the highest level of internal disagreement since 1992 [1]. This led to a surge in the US dollar and a rise in the 10-year Treasury yield toward 4.6%. The CME FedWatch tool indicated a 67.9% probability of a rate hike by December [1]. Despite these hawkish signals, silver prices remained largely unchanged on the day, defying expectations that higher rates would weigh more heavily on the non-yielding asset [1].
On Thursday, silver prices rose as Senator Rubio noted positive signs in the US-Iran negotiations but cautioned that any agreement would be unfeasible if Iran pursued a toll system for Hormuz transit, a proposal widely opposed internationally [1]. By Friday, reports emerged of Iran and Oman developing a toll framework for Hormuz, which was rejected by former President Trump, leaving talks deadlocked over issues of enriched uranium and control of the strait [1]. Oil prices rebounded, causing silver to fall 1.69% intraday to $75.35 before recovering to close at $75.55 [1].
Overall, Brent crude fell more than 5% during the week to close near $103.54, as diplomatic language around US-Iran talks turned marginally positive, though no resolution was reached [1]. The technical backdrop for silver showed little movement, with the week's range remaining tight and Thursday marking the strongest intraday high before Friday's pullback [1].
Looking ahead, the market is focused on the upcoming Federal Reserve policy meeting on June 16-17, the first under new chair Kevin Warsh, as investors seek clarity on the central bank's inflation priorities [1].
CONCLUSION
Silver demonstrated resilience this week, holding steady despite hawkish signals from the Federal Reserve and renewed geopolitical tensions. Market participants are now looking to the upcoming Fed meeting for further direction on interest rates and inflation policy.