The US dollar remains strong, while silver falls to around $56.90, hitting a new low for the period

Source: FXStreet

During the Asian trading session on Thursday,

(XAG/USD) continued its recent weak performance, with prices retreating to around , posting losses for the third consecutive trading session. The market's expectations for future Fed rate hikes continued to intensify, coupled with the

The biggest recent change in the financial market comes from the repricing of Fed policy expectations. Although international oil prices fell sharply earlier due to the easing of the Middle East situation, concerns about US inflation risks have not fully dissipated. Fed Chair Kevin Walsh reiterated in a recent speech that the Fed will remain committed to controlling inflation and emphasized that the overall US economy remains robust, which was interpreted by the market as a hawkish signal.

, showing a clear extension in expectations for a prolonged high interest rate environment. For silver, a high interest rate environment is generally unfavorable. Since silver does not generate interest income, when market rates rise, investors tend to allocate into fixed-income bonds and money market instruments, thereby reducing the

It is worth noting that there have been significant recent changes in the global energy market. With progress in peace talks between the US and Iran, international crude oil prices have returned to levels near those before the conflict erupted. The resumption of transportation through the Strait of Hormuz and the gradual recovery of Iranian energy exports have effectively eased previous concerns over energy supply disruptions.

Under normal circumstances, a drop in oil prices would help reduce future inflation pressures and might ease the necessity for further Fed tightening. However, the current market is more focused on actual inflation data and the Fed’s policy attitude, so the positive impact of falling energy prices on silver is relatively limited. The market’s next focus is on the upcoming US May Personal Consumption Expenditures Price Index (PCE) data. As one of the Fed's most closely watched inflation indicators, the PCE data will directly influence investor judgment on future rate policy.

From a market sentiment perspective, capital is continuously flowing into dollar assets and the fixed income market, while the overall performance of the precious metals sector remains weak. Unless there is a clear shift toward easing in Fed policy, the silver market may continue to face significant short-term pressure.

showing a clear bearish trend. The previous consolidation platform at high levels has been effectively broken, and the market focus continues to move lower. Currently, the price is running below the major moving averages, and the medium-term trend remains bearish. The key support levels to watch below are at $56.00 and $54.50.