Silver advances amid Hormuz reopening hopes

Silver (XAG/USD) trades with a mildly positive tone near $59.50 per troy ounce on Tuesday, up 2% for the day, but falling from recent highs and leaving the metal locked in a tight range. Fading geopolitical tension weighs on safe-haven demand, while a softer United States (US) labor market reading limits the downside by keeping the Federal Reserve (Fed) outlook uncertain.

Al Arabiya reported that an announcement regarding the reopening of the Strait of Hormuz is expected soon. Al Hadath suggested arrangements for a full reopening could be confirmed within hours. None of the reports have been officially verified, but they have already triggered a sharp unwind of the risk premium built into commodity markets during the conflict.

For Silver, the impact cuts both ways. The metal has benefited from defensive flows during the escalation, and a confirmed reopening of the waterway would remove that support. At the same time, cheaper energy and improved global trade conditions favor industrial activity. With roughly half of Silver demand tied to industrial applications, a durable easing of supply disruptions supports the medium-term consumption outlook.

On the macroeconomic front, the JOLTS report showed vacancies falling to 7.359 million in June from the revised 7.537 million and below the 7.4 million forecast. The reading points to continued cooling in labor demand and tempers the message delivered by Monday's strong ISM Manufacturing Purchasing Managers Index (PMI), which climbed to 55.6. Softer labor demand trims the odds of further Fed tightening, easing the opportunity cost of holding non-yielding assets.

The ADP Employment Change is expected to slow to 70K in July from 98K, ahead of Friday's Nonfarm Payrolls report. A run of soft prints would revive expectations that the Fed has reached the end of its tightening cycle, weakening the US Dollar and clearing the path for precious metals.

Short-term technical analysis:

On the 4-hour chart, XAG/USD trades at $59.40. The metal holds above both the 20-period Simple Moving Average (SMA) at $58.37 and the 100-period SMA at $57.93, keeping a constructive bullish tone while it consolidates just under nearby resistance. The Relative Strength Index (RSI) at 61 sits in positive territory, suggesting firm upside momentum but still shy of overbought conditions.

On the topside, initial resistance is located at $59.49, ahead of the more notable horizontal barrier at $60.00. On the downside, immediate support emerges at $59.14, followed by $58.99, with the clustered moving average floor around the 20-period SMA at $58.37 and the 100-period SMA at $57.93 expected to underpin the broader bullish bias on deeper pullbacks.

(The technical analysis of this story was written with the help of an AI tool. Know more.)