HG MARKETS: 

Silver prices traded lower on Wednesday, with XAG/USD hovering around $58.50 after facing strong selling pressure near the $59.00 level during Tuesday’s session. The rejection from this resistance zone reflects the market’s continued struggle to build bullish momentum despite supportive macroeconomic developments. Investor sentiment remains dominated by growing geopolitical uncertainty in the Middle East, where tensions between the United States and Iran have intensified once again. The US military resumed its blockade of Iranian vessels passing through the strategically important Strait of Hormuz, while President Donald Trump warned that the United States could target critical civilian infrastructure, including power plants and bridges, if hostilities continue to escalate. In response, Iranian officials threatened to disrupt additional regional energy routes, raising concerns over global oil supplies and keeping crude prices close to one-month highs. Although precious metals are generally considered safe-haven assets during periods of geopolitical instability, silver has struggled to attract sustained buying interest. Instead, traders have adopted a cautious approach, reducing exposure to risk-sensitive assets and taking profits after silver’s recent gains, resulting in renewed downward pressure on prices.

At the same time, developments in the United States offered mixed signals for the precious metals market. The latest Consumer Price Index (CPI) report showed inflation rising less than economists had expected, reinforcing the view that price pressures are gradually easing. The softer inflation data weakened the US Dollar Index (DXY) as investors reduced expectations that the Federal Reserve would need to implement immediate interest rate hikes. A weaker US dollar typically supports silver because it lowers the metal’s cost for buyers using other currencies, often increasing international demand. However, this positive influence was partially offset by remarks from Federal Reserve Chairman Kevin Warsh, who maintained a distinctly hawkish tone during his first congressional testimony. Warsh emphasized that the central bank remains fully committed to achieving its inflation target and would not allow inflationary pressures to become deeply embedded in the economy, leaving the possibility of tighter monetary policy on the table if necessary. Despite these comments, the dollar failed to recover meaningfully, suggesting that investors remain more focused on the softer inflation outlook than on the Fed’s cautionary guidance. As a result, silver found some support from currency weakness but continued to struggle as geopolitical risks and cautious market sentiment overshadowed the benefits of a softer dollar.

From a technical standpoint, silver remains in a fragile position as prices continue to trade below a descending trendline that has acted as strong resistance since the late-May highs. On the four-hour chart, XAG/USD is trading around $58.32, indicating that sellers still maintain control of the broader short-term trend despite signs that bearish momentum may be losing strength. Momentum indicators are beginning to improve, with the Relative Strength Index (RSI) climbing toward the neutral 45 level after previously signaling oversold conditions. This bullish divergence suggests that selling pressure is gradually easing and that buyers may be slowly returning to the market. Likewise, the Moving Average Convergence Divergence (MACD) has turned slightly positive, indicating that downside momentum is fading, although the signal remains too weak to confirm a sustainable trend reversal. For the technical outlook to improve significantly, silver must break decisively above the key $61.00 resistance area, where the descending trendline converges with the July 9 high. Such a breakout would likely confirm a shift in market sentiment and could open the door for a rally toward the July peak around $63.30. On the downside, however, failure to defend the late-June support level near $55.70 would reinforce the prevailing bearish structure and could accelerate selling pressure toward the 127.2% Fibonacci extension around $51.40. Until either support or resistance is convincingly broken, silver is likely to remain trapped within a volatile consolidation phase, with traders closely monitoring geopolitical headlines, Federal Reserve policy expectations, and broader risk sentiment for the next major directional catalyst.