The Fed turns dovish alongside a decline in energy prices and weakening economic data; silver continues to rebound, approaching the $60 mark.

　　

Silver prices continued their upward trend during Thursday's Asian trading session, rising for the third consecutive trading day, trading near

. This current rally is mainly driven by shifts in macro policy expectations and the resonance of volatility in risk assets, with an evident overall improvement in sentiment for precious metals

The core factor behind silver's rally comes from the marginal adjustment in Federal Reserve policy expectations. Fed Chair Kevin Walsh recently emphasized that inflation remains high, but also noted that inflation expectations have eased, without signaling further rate hikes in the short term. This relatively neutral-to-dovish stance has tempered short-term rate hike expectations in the market, thereby reducing the opportunity cost of holding non-yielding assets, which provides support for silver.

Meanwhile, the significant decline in global energy prices has further reinforced the bullish logic for precious metals. The crude oil market has weakened sharply due to the resumption of shipping through the Strait of Hormuz and progress in US-Iran negotiations, which has notably eased concerns about supply shortages and a renewed surge in inflation. As a key component of inflation expectations, the decline in energy prices directly suppresses expectations for rising real interest rates, thus indirectly benefiting precious metal assets like silver.

From a macroeconomic perspective, recent US economic indicators as a whole have shown a cooling trend. June ADP employment increased only by

, lower than the expected 113K, while the ISM Manufacturing PMI fell to , also below market estimates. These figures reinforce the judgment that economic momentum is slowing, which has shaken the market’s confidence in the Fed’s continued path of high interest rates.

Amid multiple factors, the market’s risk appetite has undergone a stage adjustment, with capital flowing back from overvalued risk assets to defensive assets such as precious metals. Silver, possessing both industrial and safe-haven characteristics, has received dual support in an environment of declining inflation expectations and easing policy outlook, and demonstrates even more elasticity than gold.

However, the market remains highly cautious, with the core focus on the upcoming US nonfarm payrolls data. This data will directly influence the market’s repricing of the Fed’s rate path; if employment data is significantly weaker than expected, it could further strengthen expectations for rate cuts or a pause in tightening, while the contrary could limit further upside for precious metals.

　　

On the 4-hour chart, silver exhibits a steady upward structure, with short-term moving averages aligned in a bullish pattern, though momentum is beginning to slow. The MACD indicator, while remaining in positive territory, shows a slower expansion of the histogram, indicating the rise is moderating. If the price remains above $60, the upward oscillating trend may continue. However, watch for sharp volatility in the near term driven by nonfarm data releases.

Silver is currently in a rebound cycle driven by both policy expectation shifts and inflation expectations. The short-term trend is relatively strong but has not yet established a clear one-sided breakthrough structure, mainly displaying a choppy upward movement. The retreat in energy prices and subdued economic data together suppress real interest rate expectations, providing silver with phase support. However, before the nonfarm payrolls are released, market volatility will increase markedly, and trend continuation will require further support from fundamentals.

Editor’s Summary:

Overall, the recent rise in silver is mainly driven by dovish Fed expectations, weaker US economic data, and declining energy prices—forming a classic macro easing trading logic. Market sentiment is bullish in the near term, but trend sustainability still depends on the performance of US employment data. Before the data release, silver will likely remain in a high-level oscillating pattern; if the data is weak, further upside may be unlocked, otherwise, profit-taking pressure could emerge for a period.

Editor: Zhu Henan