The expectation of a US-Iran peace agreement boosts market sentiment, and silver prices rebound slightly

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(XAG/USD) continued its rebound during European trading hours on Monday, rising about 0.26% to around $75.50. Improved market risk sentiment and positive progress in US-Iran negotiations provided some support for the precious metals

　　Recently, expectations for a long-term peace agreement between the United States and Iran have increased. US President Trump stated on social media that Iran was eager to reach an agreement but also emphasized that military options remain on the table. Over the weekend, Trump said in a media interview that some terms of the US-Iran agreement have been adjusted, including destroying Iranian nuclear materials and reopening the Strait of Hormuz and other crucial points.

　　

　　Meanwhile, the situation in the Middle East remains complex. Military conflict between Israel and Lebanon has erupted again recently, pushing international oil prices to rebound from previous lows. Rising energy prices have reignited concerns in the market over global inflationary pressures. Investors have begun reassessing the future policy path of major central banks, especially the Federal Reserve.

　　Historically, silver and oil prices tend to show a certain negative correlation in the current market environment. Rising oil prices mean higher energy costs, which could drive inflation higher again, forcing the Fed to maintain higher interest rates for longer.

　　

　　The market will next focus on the US non-farm payrolls report for May, to be released this Friday. Labor market performance will directly affect market perceptions of the Fed’s future policy direction. If payroll growth significantly exceeds expectations, it may reinforce expectations of extended high rates and thus put pressure on silver; conversely, if employment data slows, it could spur a rebound in the precious metals market. Additionally, US ISM Manufacturing PMI and the latest developments in the Middle East will continue to influence risk sentiment and capital flows.

　　

　　Overall, silver remains in a corrective consolidation phase. The short-term market direction will mainly depend on US economic data, Fed policy expectations, and developments in the Middle East.

　　Editor’s Summary

　　The silver market is currently being influenced by three main factors: geopolitical expectations, energy price volatility, and the Federal Reserve’s policy outlook. Improved prospects for a US-Iran peace deal have boosted market risk sentiment and provided short-term support for silver, but inflation worries ignited by rebounding oil prices are undermining expectations for future easing. From a core market logic perspective, silver’s short-term upside comes from improved risk sentiment, while the main pressure stems from the likelihood the Fed will keep rates higher for longer. In the coming week, the US non-farm payrolls data, Fed policy expectation shifts, and progress in US-Iran negotiations will be key variables affecting silver’s trend. Ahead of major data releases, the market will likely remain in a range-bound pattern.

Editor: Zhu Henan