Silver's Diplomatic Tailwind Faces a Hawkish Fed Barrier

Spot silver mounted a dramatic recovery on Friday, jumping to $75.92 per ounce after reports surfaced of a tentative 60-day ceasefire extension between the US and Iran. The rally, which lifted July futures to an opening of $76.02, marks a 4.6% turnaround from Thursday’s four-week low below $74. On a month-over-month basis, the white metal still posted a solid gain of roughly 6%.

The diplomatic breakthrough centers on a memorandum that not only extends the truce but also includes plans to clear mines and reopen the Strait of Hormuz. That waterway has been largely blocked by Iran since late February 2026, following the US-Israeli airstrikes that killed Supreme Leader Ali Khamenei. The blockade sent oil prices soaring and inflation higher, forcing the Federal Reserve to maintain an aggressive posture. Silver has shed more than 20% since the conflict erupted, though at current levels it remains well above historical averages — the metal averaged $40.03 in 2025 and just $28.27 in 2024.

Yet the ceasefire euphoria collides with stubborn macroeconomic realities. Fed officials are in no mood to ease. Governor Lisa Cook recently advocated holding rates steady and left the door open to further hikes if inflation refuses to cooperate. New York Fed President John Williams warned that inflation could temporarily spike to 4%. With the next FOMC meeting set for mid-June, a rate cut is effectively off the table. For a non-yielding asset like silver, that translates into high opportunity costs — holding the metal means forgoing income elsewhere.

Should investors sell immediately? Or is it worth buying Silber Preis?

Chartwise, silver is testing the 50-day moving average at $76.01. A decisive break above that resistance level would be required to reignite the rally, while support near $73.60 is seen as the critical floor that must hold to preserve the short-term uptrend. The Relative Strength Index sits at 58.9, suggesting room to run without entering overbought territory.

Looking further out, Trading Economics projects the price to approach $77 by quarter-end and climb above $91 over the next 12 months. That would still be roughly 35% below the all-time high of $116.89 reached in late January 2026. Fundamental supports remain in place: constrained primary mine supply and expanding industrial usage across high-tech and energy-transition sectors.

On the demand side, however, the picture is mixed. The World Silver Survey 2026 indicates that photovoltaic manufacturers are actively reducing silver content per panel, with solar demand expected to drop about 19% year-on-year. But substitutes for silver’s electrical conductivity remain elusive, and demand from electric vehicles, AI data centers, and 5G infrastructure is growing faster than thrifting can offset losses. The net effect should keep the structural supply deficit intact.

For now, the market’s near-term direction hinges on one question: will the ceasefire memorandum be formally signed by the US president? Only then would the full reopening of the Strait of Hormuz become tangible — and with it, a genuine easing of the inflation pressures that have weighed on silver for months. Until that happens, any rally remains fragile, caught between diplomatic hope and the Fed’s unyielding stance.

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