Following the escalation of US-Iran tensions this week, silver prices initially faced downward pressure. From last night up to the time of writing, US officials have stated that the United States remains committed to seeking a diplomatic solution regarding Iran, with relevant technical negotiations ongoing. In contrast, Iran's response has been relatively measured, launching retaliatory strikes on US military bases but refraining from further attacks on commercial vessels in the Strait, preventing the Middle East situation from escalating further. As risk sentiment has improved, precious metals have rebounded today, with silver showing the most significant gains. The main futures contract for silver saw intraday gains exceeding 4%.

Regarding the Federal Reserve, Chair Jerome Powell is scheduled to appear before the Senate Banking Committee on July 15th for a hearing centered on the Fed's semi-annual Monetary Policy Report to Congress. Market participants will be watching for any hawkish signals in his testimony. Additionally, US CPI data for June is set to be released next Tuesday. According to reports, the latest monthly survey from the Federal Reserve Bank of New York indicates that US consumers' median inflation expectations for the next year have risen by 0.2 percentage points to 3.7%, the highest level since September 2023. Expectations for inflation over the next three years also increased by 0.2 percentage points to 3.3%, the highest since June 2022. However, New York Fed President John Williams, often considered the Fed's third-in-command, stated in a televised interview that the recent decline in energy prices has helped alleviate inflationary pressures, which has somewhat mitigated the market pressure from rate hike expectations. Nevertheless, the price action for precious metals within their recent bottoming range remains unstable. With geopolitical factors and shifting Fed policy expectations creating significant market divergence, a cautious outlook is still warranted.