Silver (XAG/USD) hovered near $59.50 per troy ounce on Tuesday, up 2% on the day but off recent highs and still rangebound. Reports from Al Arabiya and Al Hadath pointed to a possible announcement on reopening the Strait of Hormuz, with a full reopening potentially confirmed within hours, although neither has been verified. Even so, the headlines have already helped unwind the risk premium embedded in commodities as safe-haven demand cools.
The shift could weaken Silver’s defensive bid, yet cheaper energy and smoother trade flows would support industrial activity; around half of Silver demand is tied to industrial applications. In the US, JOLTS vacancies fell to 7.359 million in June from a revised 7.537 million and below a 7.4 million forecast, offsetting Monday’s ISM Manufacturing PMI rise to 55.6. ADP Employment Change is expected at 70K in July versus 98K, while XAG/USD traded at $59.40, holding above the 20-period SMA at $58.37 and the 100-period SMA at $57.93, with RSI at 61; resistance sits at $59.49 and $60.00, and support at $59.14 then $58.99.
Trading Strategies Amid Geopolitical And Industrial Dynamics
We advise derivative traders to adopt a range-bound strategy for silver in the coming weeks as the market digests the potential reopening of the Strait of Hormuz. While a reduction in geopolitical conflict will likely strip away some of silver’s safe-haven premium from its current $59.50 level, cheaper energy costs will boost global manufacturing. Because industrial fabrication accounts for nearly 55% of total global silver demand, any improvement in trade conditions will quickly secure a solid medium-term price floor.
Positioning For The U.S. Dollar And Technical Outlook
We recommend positioning for a weaker US Dollar by purchasing near-the-money call options ahead of this week’s critical employment data. The cooling US labor market, highlighted by June JOLTS job openings falling to 7.359 million, suggests the Federal Reserve’s tightening cycle is nearing its end. Historically, a cooling job market weakens treasury yields, which directly boosts non-yielding metals like silver by reducing the opportunity cost for buyers.
From a technical standpoint, we should focus on the key horizontal resistance barrier at $60.00 while placing defensive stop-losses near the 20-period moving average of $58.37. The Relative Strength Index sits comfortably at 61, showing that the metal has healthy upward momentum without being overbought yet. If Friday’s Nonfarm Payrolls print confirms a weaker trend, we expect a breakout past the $60.00 mark, which would invite strong momentum buying.
